NEW YORK, Aug. 14 (Xinhua) -- U.S. wholesale prices for July posted its largest monthly increase since June 2022, signaling that inflationary pressures remain a challenge for the economy, the Bureau of Labor Statistics said Thursday.
The producer price index (PPI), which tracks prices for final demand goods and services, surged 0.9 percent in July, far exceeding the Dow Jones estimate of a 0.2 percent increase.
Core PPI, which excludes food and energy, also rose 0.9 percent, well above the forecast of 0.3 percent. When excluding food, energy and trade services, the index climbed 0.6 percent, the fastest pace since March 2022.
On an annual basis, the headline PPI rose 3.3 percent, the largest increase since February, while core PPI rose 3.7 percent.
"Producers are starting to feel the inflation fire heat," Chris Rupkey, chief economist at FwdBonds, wrote Thursday. "It will only be a matter of time before producers pass their higher tariff-related costs on to the backs of inflation-weary consumers."
The bulk of the upward pressure came from services inflation, which jumped 1.1 percent, its largest increase since March 2022. Trade services margins rose 2 percent amid continued developments surrounding U.S. tariff policies.
Equity markets slipped following the release of the data, as the hotter-than-expected report reduced investors' hopes for the Federal Reserve to cut interest rates after its September monetary policy meeting.
"Given how benign the CPI numbers were on Tuesday, this is a most unwelcome surprise to the upside and is likely to unwind some of the optimism of a 'guaranteed' rate cut next month," said Chris Zaccarelli, chief investment officer at Northlight Asset Management. ■