Prices one step short of the consumer level fell in July for the first time in four months.
The Department of Labor (DOL) reports the Producer Price Index (PPI) for final demand was down 0.4%, with declines in the costs of food and energy major factors. For the 12 months ended in July, the PPI declined 0.2%.
Goods and services prices
The final demand cost of goods fell 0.4%, with almost half of the decline due to a 1.1% plunge in food costs. Prices for beef and veal fell 9.8%, with the cost of gasoline, corn, motor vehicles, oilseeds, and iron and steel scrap also moving lower. Utility natural gas prices, on the other hand, rose 4.3% with fresh eggs and nonferrous scrap prices also on the upside.
The cost of final demand services dipped 0.3%, the largest decline since last March. Nearly 60% of that can be attributed to the price of apparel, jewelry, footwear, and accessories retailing (-6.0%). Also on the decline were costs for machinery and equipment wholesaling; health, beauty, and optical goods retailing; food retailing; loan services; and automotive fuels and lubricants retailing. Trade services (prices received by wholesalers and retailers) fell 1.3%.
Increases were posted in prices for traveler accommodation services (+3.9%) chemicals and allied products wholesaling, and for securities brokerage, dealing, investment advice, and related services also moved higher.
The “core” rate of inflation, which excludes the volatile food and energy components, was up 0.7% year-over-year, down significantly from the 1.3% growth rate posted in June.
The complete report is available on the DOL website.