US July Producer Prices Flat as Energy Costs Ease, Undercutting Inflation Fears

US producer prices were unchanged in July on a monthly basis, missing expectations of a 0.2% gain and following a 0.1% decline in June, according to data released August 13. On an annual basis, the Producer Price Index rose 4.7%, below the 4.9% forecast. Core PPI, which strips out food and energy, climbed 0.2% month-over-month against an expected 0.3%, while the year-over-year core reading came in exactly at the 4.2% estimate.

Lower energy prices were the primary force holding wholesale inflation in check. The softer-than-expected reading adds to a broader disinflation picture that includes a CPI print of 3.5% with core at 2.6%, a weak July jobs report of 57,000 nonfarm payrolls with negative prior revisions, and a GDP miss at 1.5% growth. Analysts noted the combined data may ease pressure on the Federal Reserve to maintain a hawkish stance.

Gold was little changed immediately after the release, last trading down 0.5% at 4,382.22 dollars per ounce.