US producer prices are rising surprisingly sharply
Rising service costs raise prices at the producer level. Compared to the same month of the previous year, they were 0.8% higher.
Producer prices act as an early signal of growth in consumer prices.
Image: David Goldman/AP Photo via Keystone
Producer prices in the U.S. have risen, driving up costs of services. July rose 0.8% compared to the same month last year, the Labor Ministry reported on Friday. After the inflation rate was revised down to 0.2% in June, economists polled by Reuters had expected an increase of just 0.7%. The prices apply to previous works – ie before the products are further processed or traded. They therefore act as an early signal of growth in consumer prices.
In July Inflation in the United States Tightened for the first time in a year. However, at 3.2%, inflation was not as strong as experts had expected.
After the better-than-expected data, futures markets speculated that the US Federal Reserve would not raise interest rates further. The central bank has raised interest rates from near zero to 5.25% to 5.5% from early 2022 to contain rampant inflation. However, San Francisco Fed President Mary Daly cautioned against declaring victory on inflation too soon. The central bank still has a lot of work to do. In particular, he wants to see further progress in the fight against inflation in the services sector.
Reuters
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