CPI Rises More Than Anticipated

Prices paid to U.S. producers for goods and services rose slightly more than forecast in June (Reuters, subscription).

“The producer price index for final demand rose 0.2% last month after being unchanged in May, the Labor Department’s Bureau of Labor Statistics said on Friday. Economists polled by Reuters had forecast the PPI nudging up 0.1%.”

The details: In the year through June, the PPI rose 2.6% after increasing 2.4% in May.

The news follows a lower-than-expected Consumer Price Index reading for June, out yesterday.

What it means: “With the Federal Reserve now wary of labor market weakness, economists and financial markets are increasingly betting on a rate cut in September, with another reduction in borrowing costs expected in December.”

In congressional testimony this week, Fed Chair Jerome Powell acknowledged that inflation was improving but pointed out the “risks to the labor market,” according to Reuters.