Wholesale Inflation Hotter Than Expected in July

Wholesale prices rose far more than expected in July, providing a potential sign that inflation is still a threat to the U.S. economy, a Bureau of Labor Statistics report Thursday showed.

The producer price index, which measures final demand goods and services prices, jumped 0.9% on the month, compared with the Dow Jones estimate for a 0.2% gain. It was the biggest monthly increase since June 2022.

Excluding food and energy prices, core PPI rose 0.9% against the forecast for 0.3%. Excluding food, energy and trade services, the index was up 0.6%, the biggest gain since March 2022.

On an annual basis, headline PPI increased 3.3%, the biggest 12-month move since February and well above the Federal Reserve’s 2% inflation target.

Services inflation provided much of the push higher, rising 1.1% in July for the largest gain also since March 2022. Trade services margins climbed 2%, coming amid ongoing developments in President Donald Trump’s tariff implementations.

In addition, 30% of the increase in services came from a 3.8% rise in machinery and equipment wholesaling. Also, portfolio management fees surged 5.4% and airline passenger services prices climbed 1%.

Stock market futures fell following the release, while shorter-duration Treasury yields moved higher.