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Producer prices increase

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Producer prices increase

0.2% increase exceeds expectations.

The Producer Price Index for final demand rose 0.2% in July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices increased 0.4% in June and

0.5% in Mayl. However, on an unadjusted basis, the final demand index declined 0.8% for the 12 months ended in July, the sixth straight 12-month decrease.

Analysts had expected an increase in July’s PPI of 0.1%.

The increase for the month can be traced largely to prices for service, which rose 0.4% during the month. The index for goods, on the other hand, decreased at a 0.1% clip.

The rise in wholesale inflation, if sustained, will likely trigger the Fed to enact its long-anticipated reduction in quantitative easing by raising interest rates in the fall – an act delayed by disappointing economic performance in the first part of the year.

 

 

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