PPI Rises Modest 0.1% in July

The producer price index, which tracks payments to factories, farmers and other producers, rose just 0.1% in July as prices for energy rose slower and food prices declined, the Labor Department reported Thursday.

The PPI, which measures inflation pressures before they reach retail store shelves, rose 0.5% in June. Prices excluding food and energy, the so-called “core” index, climbed 0.2% after dropping 0.1%.

In a separate report, Labor said that the number of Americans filing first-time claims for jobless benefits rose a slim 2,000 to 398,000 last week.

Meanwhile, analysts told Bloomberg that the small moves in the core index show that there are not any pricing pressures or pricing power, meaning neither inflation nor deflation are really serious concerns right now. However, a rising core index does show some demand for goods, which could mean more shipments for trucking companies.

Energy prices rose just 0.3% after a steep 3.4% gain in June, while food prices slid 0.2%, the first decline since September last year.

According to the report, producer prices were 3% higher in July than a year ago, compared with a 1.2% decline in the same period last year.

Labor’s jobless claims report suggested the labor market, which has shed jobs for the last six months, has stabilized and may be showing some marginal improvement, Reuters reported.

Initial claims have now held below 400,000 for four consecutive weeks. Economists say claims below that level indicate some job creation.

The four-week moving average of claims, which offers a more reliable guide by smoothing weekly volatility, inched down 4,250 to 394,250, its lowest level since mid-February. The four-week average has now dropped for five straight weeks.

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