Wholesale prices in the U.S. rose at a slower pace in July as fuel costs dropped by the most in eight months.
The 0.1% increase in the producer price index matched the median forecast of economists surveyed by Bloomberg News and followed a 0.4% gain the prior month, the Labor Department reported.
The so-called core measure, which strips out volatile food and fuel, increased 0.2%.
“It’s just more of the same,” Stuart Hoffman, chief economist at PNC Financial Services Group Inc. said. “From that point of view, at the wholesale level, there’s not much inflation to pass through.”
The median estimate was based on a survey of 70 economists. Projections ranged from a drop of 0.1% to a 0.4% gain. Wholesale prices excluding food and energy were forecast to rise 0.2 %, the same as in June.
Compared with a year before, companies paid 1.7% more for goods and services, down from a 1.9% rise in June. The core index increased 1% in the 12 months ended July after a 1.8% gain.
The wholesale prices report was expanded this year to include 75 % of all U.S. goods and services, up from about a third for the old metric, which tallied the costs of goods alone. The index now includes prices received for services, government purchases, trade and construction.
The cost of services increased 0.1 % in July, reflecting higher transportation charges for moving freight on railroads and trucks. Prices for goods were unchanged last month and were up 2% since July 2013.
Energy costs dropped 0.6 % last month, the most since November, after a 2.1% jump in June. Gas prices have been falling for almost two months, which may be keeping a little more money in consumers’ pockets. The average price of a gallon of regular unleaded gas was $3.47 on Aug. 13, down from this year’s peak of $3.70 in April.
The decrease in fuel last month was offset by a 0.4% increase in wholesale food costs.