Producer Prices Come in Lighter Than Expected, Fueling Anticipation of a September Fed Rate Cut

Producer prices—a metric of the prices paid by businesses for goods and services—rose less than market forecasts, suggesting that inflationary pressures might be dissipating heading into a key Federal Reserve policy meeting next month. According to the Bureau of Labor Statistics (BLS), the Producer Price Index (PPI) rose 0.1 percent in July, down from 0.2 percent in June. This came in below the consensus estimate of 0.2 percent. On a year-over-year basis, the PPI slowed to a smaller-than-expected 2.2 percent, down from 2.7 percent in the previous month. Prices for final demand goods surged 0.6 percent, the largest monthly increase since the 1.1 percent spike in February, the BLS said. Most of the gain can be attributed to higher energy prices, which climbed 1.9 percent....