US producer price inflation accelerates to 3.3% in July

The annual rate of US producer price inflation accelerated in July, with prices rising on a monthly basis, indicating that higher tariffs are beginning to take their toll.

Data released by the US Department of Labor on Thursday showed that the Producer Price Index (PPI) climbed to 3.3% year-on-year (YoY) in July, compared to 2.4% in June.

Core PPI inflation — which excludes volatile items such as food, energy, and trade services — also surged on an annual basis to 2.8% in July, compared to 2.5% in June.

On a monthly basis, the PPI ticked 0.9% higher against its June reading, above expectations for a 0.2% hike.

Final goods prices increased 0.7% in July, rising the most since January, with prices for fresh and dried vegetables soaring by 38.9%.

Services prices also accelerated by 1.1% in July, marking the largest uptick since March 2022, with prices for portfolio management, brokerage, trading, and investment services also edging up.

This data came after the Bureau of Labor Statistics revealed on Tuesday that the annual rate of consumer price inflation held steady at 2.7% in July, confounding forecasts for a 2.8% jump.