Wholesale price inflation slows last month as gas, food costs fall
Summary
Wholesale prices in the U.S. did not rise from June to July, showing a slowdown in inflation partly due to falling gas and food costs. This slowdown may indicate that consumer inflation could decrease in the coming months, but wages have not kept up with price increases, affecting household budgets.Key Facts
- The producer price index (PPI), which tracks inflation before it reaches consumers, rose 4.7% in July compared to last year, down from a 5.5% increase in June.
- Wholesale prices stayed flat from June to July, after a small 0.1% decrease the month before.
- Core wholesale inflation, which excludes volatile food and energy costs, fell to 4.2% year-over-year in July, down from 4.7% in June.
- Gas prices went down in early July but increased again later in the month and into August.
- Consumer prices have increased faster than wages for four months, making it harder for many Americans to afford essentials like rent and utilities.
- The Federal Reserve may decide not to raise interest rates in September because inflation is cooling and economic growth appears weak.
- Job cuts in July suggest economic weakness, which could influence the Fed’s decision on interest rates.
- The personal consumption expenditures (PCE) index, a key inflation measure watched by the Fed, will be released later in the month.
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