US Producer Prices Unchanged in July as Energy Costs Fall

U.S. producer prices were unchanged in July, according to a government report released Thursday, as falling energy and food costs offset a modest increase in services prices. The flat reading in the Producer Price Index for final demand followed a revised 0.1 percent decline in June, the Bureau of Labor Statistics said. The data, which came in below economists' forecasts for a 0.2 percent increase, adds to recent evidence that inflationary pressures are easing.

The report showed that goods prices fell 0.7 percent, driven by a 3.1 percent drop in energy prices. This marked the second consecutive month of declining energy costs, with wholesale gasoline prices falling 5.7 percent. Food prices also decreased, declining 0.9 percent for the largest drop in over a year. In contrast, the cost of services rose 0.2 percent, led by a 6.5 percent surge in portfolio management fees, a measure that rises when financial assets appreciate in value. This increase was partially offset by declines in airline fares and hotel room prices.

On an annual basis, producer prices increased 4.7 percent through July, down from a 5.5 percent rise in June. The core PPI, which excludes volatile food and energy...