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Producer Prices Increased More Slowly in July

After yesterday’s big headline about the easing of consumer price increases in July, here’s another positive data point: producer prices are also moderating, according to The Wall Street Journal (subscription).

The numbers: “The producer-price index, which generally reflects supply conditions in the economy, increased by 9.8% annually in July, the smallest annual rise since October 2021’s 8.9% increase, the Labor Department said Thursday. Producer prices climbed 11.3% in June from a year earlier.”

  • “Producer prices decreased a seasonally adjusted 0.5% in July from the prior month, down sharply from June and the first decline since April 2020 . . . .”

The forecast: NAM Chief Economist Chad Moutray gave us his read on the Federal Reserve following yesterday’s announcement of the consumer price numbers.

  • “While these data will continue to put pressure on the Federal Reserve to act aggressively and decisively on inflation, signs of possible cooling in pricing pressures might offer some flexibility on monetary policy,” said Moutray.
  • “Indeed, the Federal Open Market Committee might increase the federal funds rate by 50 basis points at its Sept. 20–21 meeting instead of the 75 basis-point hike that some were calling for after the strong labor market numbers the week before.”
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