WASHINGTON (dpa-AFX) - Producer prices in the U.S. crept higher in the month of July, according to a report released by the Labor Department on Tuesday.
The Labor Department said its producer price index for final demand inched up by 0.1 percent in July after rising by 0.2 percent in June. The uptick by producer prices matched economist estimates.
Meanwhile, the report said the annual rate of producer price growth slowed to 2.2 percent in July from an upwardly revised 2.7 percent in June.
Economists had expected the annual rate of producer price growth to decelerate to 2.3 percent from the 2.6 percent originally reported for the previous month.
'With officials more attentive to downside risks to the labor market of restrictive monetary policy, the report will be viewed favorably by Fed officials and supports the case for a rate cut in September,' said Matthew Martin, U.S. Economist at Oxford Economics.
The modest monthly increase by producer prices was partly due to a significant rebound by energy prices, which surged by 1.9 percent in July after plunging by 2.1 percent in June.
The Labor Department said prices for food also climbed by 0.6 percent in July after inching up by 0.1 percent in June.
Meanwhile, the report said prices for services dipped by 0.2 percent in July after rising by 0.4 percent in each of the two previous months.
Prices for trade services slumped by 1.3 percent in July after jumping by 1.4 percent in June, while prices for transportation and warehousing and other services rose by 0.4 percent and 0.3 percent, respectively.
Excluding prices for food, energy and trade services, core producer prices rose by 0.3 percent in July after edging up by 0.1 percent in June.
The annual rate of growth by core consumer prices accelerated to 3.3 percent in July from an upwardly revised 3.2 percent in June.
On Wednesday, the Labor Department is scheduled to release its more closely watched report on consumer price inflation in the month of July.
Economists currently expect consumer prices to rise by 0.2 percent in July after edging down by 0.1 percent in June, while the annual rate of consumer price growth is expected to dip to 2.9 percent from 3.0 percent.
Core consumer prices, which exclude food and energy prices, are also expected to rise by 0.2 percent in July after inching up by 0.1 percent in June. The annual rate of core price growth is expected to slow to 3.2 percent from 3.3 percent.
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