U.S. PPI Slows More Than Expected as Producer Inflation Eases
U.S. producer inflation slowed more sharply than expected in July, supported by further declines in energy and food costs. The data suggests that price pressures at the producer level are beginning to ease.
The Producer Price Index rose 4.7% year-on-year in July, slowing significantly from 5.5% in June. The reading also came in below market expectations, reinforcing signs that wholesale inflation is losing momentum.
On a monthly basis, PPI was unchanged at 0.0% in July, indicating that overall producer prices did not increase from the previous month.
Meanwhile, Core PPI, which excludes food and energy, rose 0.2% month-on-month. On an annual basis, core producer inflation stood at 4.2%, showing that underlying price pressures remain elevated even as headline inflation cools.
Lower energy and food costs were key factors behind the slowdown in producer inflation. This is important because easing input costs can reduce pressure on businesses to pass higher prices on to consumers.
Newsmaker Analysis: The July PPI report sends a relatively dovish signal to markets as producer inflation slowed more than expected. The data could reduce pressure on the Federal Reserve to raise interest rates in the near term and may weigh on the U.S. dollar and Treasury yields. However, Core PPI remaining above 4% shows that underlying inflation risks have not completely disappeared.(mrv)
Source : Newsmaker.id
