Wholesale prices flat in July, adding to signs inflation is cooling

Wholesale prices in the United States were unchanged in July, the Bureau of Labor Statistics reported Thursday, falling short of the 0.2% increase economists had expected. The producer price index followed a 0.1% decline in June, a figure that was revised from an initially reported 0.3% drop.

Excluding food and energy, core wholesale prices rose 0.2%, below the forecast for a 0.3% gain, though a narrower measure excluding trade services rose 0.4%. On an annual basis, the headline index rose 4.7% and the core index rose 4.2%. Energy costs fell 3.1%, including a 5.7% drop in gasoline prices, while food prices fell 0.9%; services prices rose 0.2%, lifted by a 6.5% jump in portfolio management costs.

Stock futures rose and Treasury yields fell after the report, and traders further reduced bets on a Federal Reserve interest rate hike at the central bank's September meeting, now leaning toward October or December instead. The data followed Wednesday's consumer price index report, which showed consumer prices rose 0.1% in July with an annual rate of 3.4%, still above the Fed's 2% target. Separately, initial jobless claims rose to 209,000 for the week ended Aug. 8, above estimates and up 9,000 from the prior week.

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