US producer prices rise more quickly than expected in July
US producer prices rose more quickly than anticipated last month due to the higher cost of energy and transportation.
According to the US Department of Labor, in seasonally adjusted terms, so-called final demand prices jumped at a month-on-month pace of 1.0% in July (consensus: 0.6%).
Final demand goods prices increased by 0.6% when compared against June with a 2.6% jump in energy prices more than offsetting a 2.1% decline in food prices.
On the services side of the equation meanwhile, final demand prices were up by 1.1% on the month, led by a 2.7% increase in those for transportation and warehousing.
In comparison to one year ago, total final demand prices had risen by 7.8%.
Prices for final demand goods, less food and energy, increased by 1.0%.
"If aggregate demand remains strong, as we have been forecasting, then businesses will have flexibility to raise product prices along their supply chains and to consumers," said Mickey Levy at Berenberg Capital Markets.
"Some of the price increases reflect supply bottlenecks; however, more and more, the mounting inflation pressures at the producer and consumer levels are taking on characteristics of traditional cyclical inflation generated by excess stimulus rather than temporary blips that will conveniently dissipate."