EmailProducer prices increased 0.3% in July after rising 0.1% in June. That was the biggest monthly increase in the PPI since increasing 0.9% in September 2011. The Briefing.com consensus expected the PPI to increase 0.2%. Energy prices fell 0.4% in July, the fifth consecutive monthly decline. That trend is expected to stop in August as higher crude and gasoline prices enter the PPI data. Food prices rose 0.5% for the second consecutive month. Food prices are expected to increase significantly over the next few months as drought conditions across the U.S. lower agricultural yields. Excluding food and energy, core PPI increased 0.4%. That is up from 0.2% growth in June and is the largest increase since a 0.6% increase in January.
The consensus expected core price growth to remain at 0.2%. Almost half of the gain in core prices was the result of a 1.6% increase in light motor truck prices. Those prices increased 1.5% in June but were expected to moderate in July. Outside of truck prices, the core PPI followed normal trends. Inflationary pressures down the manufacturing pipeline remained weak. Core intermediate goods prices fell 0.9%. That was the third consecutive monthly decline. Core crude prices fell for a fourth consecutive month, down 1.1% in July.
