Wholesale prices were flat in July, below expectations for 0.2% increase
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- Bureau of Labor Statistics reported the producer price index was flat in July, below the 0.2% Dow Jones consensus estimate and after a revised June reading of -0.1% (previously reported as -0.3%).
- Core PPI rose 0.2% in July, below the 0.3% forecast, while core PPI excluding trade services jumped 0.4%.
- Goods prices fell 0.7% in July, driven by a 3.1% drop in energy and a 5.7% slide in the gasoline index; services prices rose 0.2%, lifted by a 6.5% surge in portfolio management.
- On an annual basis, headline PPI rose 4.7% and core PPI rose 4.2%, per unadjusted figures.
- Wednesday's CPI report showed consumer prices up just 0.1% in July, leaving annual headline inflation at 3.4% — still well above the Fed's 2% target — though core CPI's 2.5% annual rate matched the pre-war level.
- Federal Reserve rate-hike odds shifted, with traders now pricing a hike in October or December rather than the September 15-16 FOMC meeting; stock futures turned positive and Treasury yields fell after the report.
- Initial jobless claims climbed to a seasonally adjusted 209,000 for the week ended Aug. 8, up 9,000 from the prior week and above the 204,000 estimate.
Why it matters: Stock futures turned positive and Treasury yields fell after the flat PPI print, with traders pulling September rate-hike odds and shifting expectations to October or December — though annual headline CPI at 3.4% and annual PPI at 4.7% remain more than double the Federal Reserve's 2% target, keeping the inflation fight unresolved.
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