Partly reflecting a steep drop in prices for trade services, the Labor Department released a report on Friday showing an unexpected decrease in U.S. producer prices in the month of July.
The Labor Department said its producer price index for final demand fell by 0.4 percent in July after rising by 0.5 percent in June. Economists had expected the index to inch up by 0.1 percent.
The unexpected decline in producer prices came as prices for trade services tumbled by 1.3 percent in July after climbing by 0.7 percent in June. The trade index measures margins received by wholesalers and retailers.
The report also showed a pullback in energy prices, which dropped by 1.0 percent in July following a 4.1 percent jump in June. Food prices also slumped by 1.1 percent in July after rising 0.9 percent in June.
Excluding food and energy prices, core producer prices dipped by 0.3 percent in July following a 0.4 percent increase in June. Core prices had been expected to edge up by 0.2 percent.
Meanwhile, the Labor Department said prices for final demand excluding food, energy, and trade services were unchanged in July after edging up 0.3 percent in June.
Reflecting the monthly pullback in producer prices, the annual rate of change swung to a drop of 0.2 percent in July from a gain of 0.3 percent in June
Additionally, the annual rate of core producer price growth slowed to 0.7 percent in July from 1.3 percent in the previous month.
The Labor Department is scheduled to release its more closely watched monthly report on consumer price inflation next Tuesday.
For comments and feedback contact: editorial@rttnews.com
Business News
May 15, 2026 15:25 ET Apart from the confirmation of Kevin Warsh as the next Fed chair, the main news on the economics front this week included key price data from the U.S. and the first quarter economic growth figures from major economies. Both consumer prices and producer costs have started to reflect the effect of supply shocks due to the Middle East conflict. In Europe, GDP data was in focus, while inflation data from China dominated the news flow in Asia.