The prices charged by U.S. businesses for goods and services increased more than expected in July, a sign that the U.S. economy is not yet on a steady path to lower inflation.
The Labor Department’s producer price index, which is based on what U.S. businesses are paid for goods and services, rose 0.3 percent compared with a month earlier. Compared with a year ago, the producer price index (PPI) is up 0.8 percent.
Economists had been expecting the monthly figure would rise by 0.2 percent compared with June. The forecast for annual producer inflation was for a 0.7 percent climb.
The producer price index differs from the consumer price index, which tracks what U.S. households pay for goods and services purchased for consumption, because it includes sales to businesses, governments, nonprofits, and exports. It includes purchases of health care services, for example, that are made by employers and institutions. Sales taxes, which are included in CPI, are excluded from PPI because they are ultimately paid to government rather than producers.
Core PPI, which excludes food and energy prices, rose 0.3 percent, a tenth of a point higher than expected. For the year, core PPI is up 2.4 percent. So-called “core core” PPI, which also excludes trade services (a measure of margins for wholesalers and retailers), rose 0.2 percent compared with a month earlier and was up 2.7 percent over 12 months.
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