Economists surveyed by The Wall Street Journal expected the index to rise 0. 2 per cent last month and predicted a similar 0. 2 per cent increase excluding food and energy. Producer prices rose 1. 7 per cent in July from a year earlier, slipping from annual gains of 1. 9 per cent in June, 2 per cent in May and 2. 1 per cent in April. "After briefly breaching the 2 per cent threshold and sparking fears of runaway inflation, headline price pressures appear to be abating," Sterne Agee chief economist Lindsey Piegza said in a note to clients.
Prices for services rose 0. 1 per cent last month after climbing 0. 3 per cent in June. "Aside from recent energy weakness, the PPI results continued to point to a steady firming in underlying inflation trends that we expect to continue to be seen in a continued inflection higher" in other inflation gauges, Morgan Stanley economist Ted Wieseman said in a note to clients.
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