Whole­sale prices down by 0.1% in July

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - — The As­so­ci­ated Press

WASH­ING­TON — Prices at the whole­sale level slipped in July, the first de­cline in 11 months and fur­ther ev­i­dence that in­fla­tion re­mains a no-show in the econ­omy.

The La­bor Depart­ment said Thurs­day that its pro­ducer price in­dex, which mea­sures in­fla­tion pres­sures be­fore they reach the con­sumer, edged down 0.1 per­cent last month, re­flect­ing a third month of de­clines in en­ergy prices and a flat reading for food. The July re­sult fol­lowed a 0.1 per­cent gain in June. It was the first drop in whole­sale prices since a de­cline of 0.2 per­cent last Au­gust.

Core in­fla­tion, which ex­cludes volatile food and en­ergy costs, also fell last month by 0.1 per­cent. Over the past 12 months, whole­sale prices are up a mod­er­ate 1.9 per­cent, while core prices have risen 1.8 per­cent.

In­fla­tion has been low through­out this eco­nomic re­cov­ery. For the past five years, it has fallen be­low the Fed­eral Re­serve’s tar­get for an­nual price gains of 2 per­cent a year. At the be­gin­ning of this year, in­fla­tion by a gauge pre­ferred by the Fed did climb as high as 2.2 per­cent in Fe­bru­ary com­pared with a year ago. But it has since back­tracked and in June reg­is­tered a 12-month gain of just 1.4 per­cent.

The La­bor Depart­ment will re­lease its re­port on con­sumer prices to­day.

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