Please ensure Javascript is enabled for purposes of website accessibility
US Wholesale Inflation Fell in July for 1st Time in 2 Years
News
By News
Published 3 years ago on
August 11, 2022

Share

 

Prices at the wholesale level fell from June to July, the first month-to-month drop in more than two years and a sign that some of the U.S. economy’s inflationary pressures cooled last month.

Thursday’s report from the Labor Department showed that the producer price index — which measures inflation before it reaches consumers — declined 0.5% in July. It was the first monthly drop since April 2020 and was down from a sharp 1% increase from May to June.

The easing of wholesale inflation suggests that consumers could get some relief from relentless inflation in the coming months. The wholesale report follows government data Wednesday that showed that consumer inflation was unchanged from June to July — the first flat figure after 25 straight months of increases.

Yet economists caution that it’s still too early to say that inflation is headed steadily lower.

“The July deceleration … is a move in the right direction,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “But producer costs continue to rise at a rapid pace, well above target.”

Wholesale food prices rose 1% from June to July, a sign that grocery prices will likely keep rising in the coming months. The wholesale costs of eggs, beef and vegetables all jumped.

Trucking freight costs, though, fell 0.3%, evidence that some supply chain snarls are easing.

Inflation at the wholesale level still jumped 9.8% in July compared with a year earlier, suggesting that inflation will remain at painful levels for months to come. That was down from a year-over-year surge of 11.3% in June — near a four-decade high — and was the smallest annual rise in eight months.

Thursday’s report showed that wholesale gas prices tumbled 16.7% from June to July, a sign that retail prices at the pump will continue to decline this month and likely into September. Consumers are already seeing steady reductions: Gas prices fell below $4 a gallon, on average, on Thursday for the first time in five months.

The milder inflation data, and last month’s unexpectedly robust hiring that helped lower the unemployment rate to a half-century low of 3.5%, have provided President Joe Biden with some positive economic news after months of accelerating price spikes hammered his approval ratings. Congressional Republicans have made rising inflation a major line of attack in the upcoming midterm elections.

And the Federal Reserve has embarked on its fastest pace of interest rate hikes since the early 1980s in an effort to quell inflation, and will likely keep raising borrowing costs for the rest of this year. Its short-term rate is currently in a range of 2.25% to 2.5%, the highest since 2018.

Chair Jerome Powell has said the Fed would need to see a series of declining inflation readings before it would consider pausing its rate increases. The Fed could announce a third straight three-quarter point rate hike when it next meets in late September or instead carry out a less drastic half-point hike.

Thursday’s producer price data captures inflation at an earlier stage of production and can sometimes signal where consumer prices are headed. It also feeds into the Fed’s preferred measure of inflation, which is called the personal consumption expenditures price index.

RELATED TOPICS:

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Virginia Giuffre, Voice in Epstein Sex Trafficking Scandal, Dies at 41

DON'T MISS

California Proposes Allowing Testing of Self-Driving Heavy-Duty Trucks

DON'T MISS

Higher Taxes on Millionaires? Trump Says He’s Open, but Many in His Party Are Not

DON'T MISS

Ex-US Rep. George Santos Sentenced to Over 7 Years in Prison for Fraud and Identity Theft

DON'T MISS

Selma Mayor Charged With Electioneering Violation on Election Day

DON'T MISS

Fresno Air Improves. Where Does It Rank in the US?

DON'T MISS

As Harris Ponders Run for CA Governor, Is She Prepared for the Daunting Job?

DON'T MISS

Stocks Rise With Tech-Related Shares, Notch Weekly Gains; Dollar Up

DON'T MISS

Conflicting US-China Talks Statements Add to Global Trade Confusion

DON'T MISS

Driving Near the Fresno Airport Next Week? Plan for Road Closures

UP NEXT

California’s Economy Ranks Fourth Worldwide, Surpasses Japan

UP NEXT

Exclusive: US Congress Republicans Seek $27 Billion for Golden Dome in Trump Tax Bill

UP NEXT

On Major Economic Decisions, Trump Blinks, and Then Blinks Again

UP NEXT

Given Its Failures, Can California Manage a Transition to a Carbon-Free Future?

UP NEXT

Tariff Optimism Fuels Wall Street Gains as Trump Eases Stance on Powell

UP NEXT

California’s Economy Was Already Sluggish Before Trump’s Global Tariffs

UP NEXT

Student Loans in Default Will Be Sent for Collection. Here’s What to Know for Borrowers

UP NEXT

Wall Street Rallies and Recovers All of Monday’s Slide as the Dollar and US Bond Market Steady

UP NEXT

Gold’s Record Run Gains Further Traction; Market Conquers $3,500/Oz

UP NEXT

How Companies Are Responding to Trump’s Tariffs

Ex-US Rep. George Santos Sentenced to Over 7 Years in Prison for Fraud and Identity Theft

13 hours ago

Selma Mayor Charged With Electioneering Violation on Election Day

14 hours ago

Fresno Air Improves. Where Does It Rank in the US?

14 hours ago

As Harris Ponders Run for CA Governor, Is She Prepared for the Daunting Job?

14 hours ago

Stocks Rise With Tech-Related Shares, Notch Weekly Gains; Dollar Up

15 hours ago

Conflicting US-China Talks Statements Add to Global Trade Confusion

15 hours ago

Driving Near the Fresno Airport Next Week? Plan for Road Closures

15 hours ago

Misty Her: Push for Fresno Unified Turnaround Starts Now With ‘Boots on the Ground’

16 hours ago

Fresno Police Arrest 17 in Domestic Violence Crackdown

16 hours ago

What’s Next for Fresno Smoke Shop Ordinance: Lawsuit, Veto, Override?

17 hours ago

Virginia Giuffre, Voice in Epstein Sex Trafficking Scandal, Dies at 41

Virginia Giuffre, a former victim of Jeffrey Epstein’s sex-trafficking ring who said she was “passed around like a platter of fruit” as a te...

10 hours ago

Virginia Roberts Giuffre speaks to reporters in New York on Aug. 27, 2019. Giuffre, a former victim of Jeffrey Epstein’s sex-trafficking ring who said she was “passed around like a platter of fruit” as a teenager to rich and powerful predators, including Prince Andrew of Britain, died on Friday at her farm in Western Australia. She was 41. (Jefferson Siegel/The New York Times)
10 hours ago

Virginia Giuffre, Voice in Epstein Sex Trafficking Scandal, Dies at 41

13 hours ago

California Proposes Allowing Testing of Self-Driving Heavy-Duty Trucks

13 hours ago

Higher Taxes on Millionaires? Trump Says He’s Open, but Many in His Party Are Not

13 hours ago

Ex-US Rep. George Santos Sentenced to Over 7 Years in Prison for Fraud and Identity Theft

Selma Mayor Scott Robertson (left) has been charged with misdemeanor electioneering for allegedly campaigning near voters at a polling place during the November 2024 election. (Facebook)
14 hours ago

Selma Mayor Charged With Electioneering Violation on Election Day

14 hours ago

Fresno Air Improves. Where Does It Rank in the US?

14 hours ago

As Harris Ponders Run for CA Governor, Is She Prepared for the Daunting Job?

15 hours ago

Stocks Rise With Tech-Related Shares, Notch Weekly Gains; Dollar Up

Help continue the work that gets you the news that matters most.

Search

Send this to a friend