Investing.com – U.S. producer price inflation and its core reading unexpectedly decreased in July, showing that factory gate prices eased last month and reducing inflationary pressures, official data showed on Thursday.
In a report, the Commerce Department said that producer prices decreased 0.1% last month, missing the forecast for it to repeat a 0.1% gain.
Year-over-year, the producer price index (PPI) rose 1.9% in July, compared to expectations for a gain of 2.2% and easing from the 2.0% increase in the preceding month.
The core producer price index, that excludes food and energy, also slipped 0.1% in July, missing forecasts for a gain of 0.2% and compared to the prior month’s 0.1% rise.
Core producer prices increased at an annualized rate of 1.8% last month, below forecasts for a 2.1% increase and the gain of 1.9% in June.
Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories. Furthermore, when producers pay more for goods, they are more likely to pass price increases on to the consumer, so PPI could be considered a leading indicator of inflation.
After the report, which was released simultaneously with weekly jobless claims, the dollar trimmed gains. EUR/USD was trading at 1.1738 from around 1.1726 ahead of the release of the data, GBP/USD was at 1.3001 from 1.2991 earlier, while USD/JPY was at 109.62 from 109.77 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 93.47, compared to 93.57 ahead of the report.
Meanwhile, U.S. stock futures pointed to a lower open. The Dow futures fell 0.25%, the S&P 500 futures lost 0.42%, while the Nasdaq 100 futures traded down 0.66%.
Elsewhere, in the commodities market, gold futures traded at $1,289.20 a troy ounce, compared to $1,287.12 ahead of the data, while crude oil traded at $50.09 a barrel from $50.12 earlier.