The Bureau of Labor Statistics said that producer prices for final demand goods and services inched down 0.1 percent in July, offsetting the 0.1 percent gain seen in June. For manufacturers, producer prices for final demand goods were off by 0.1 percent in July after rising by 0.2 percent in June. Energy prices pulled back for the third straight month, down 0.3 percent, with food prices flat. On a year-over-year basis, final demand food and energy costs have risen 1.9 percent and 4.3 percent, respectively. Excluding food and energy, producer prices for final demand goods were also down 0.1 percent.
Overall, producer prices for final demand goods and services have increased 2.0 percent since July 2016, remaining steady with June’s rate but decelerating from April’s 2.5 percent year-over-year pace, which was the fastest pace since February 2012. Nonetheless, raw material costs have accelerated over the course of the past 12 months, as the year-over-year rate was zero percent one year ago. In a similar way, core producer prices – which exclude food, energy and trade services – have grown 1.9 percent year-over-year, slowing from 2.1 percent in the prior release but up from 1.0 percent in July 2016.