US Producer Prices Flat in July, Jobless Claims Rise Slightly

US producer prices were unchanged in July, a sign that inflationary pressures are cooling at the wholesale level. The Labor Department reported that the Producer Price Index (PPI) for final demand was flat last month, following a revised 0.1% decline in June. This was below economist expectations of a 0.2% rebound.

The flat reading was driven by a 0.7% drop in goods prices, including a 3.1% decrease in energy costs and a 0.9% fall in food prices. Meanwhile, the cost of services rose 0.2%, lifted by a 6.5% jump in portfolio management fees, which was partially offset by a 3.4% decline in airline fares.

On an annual basis, the PPI increased 4.7% in July, down from a 5.5% gain in June. The data suggests that the Federal Reserve may hold interest rates steady at its September meeting, as financial markets now price in a roughly 67.6% chance of no rate hike.

In a separate report, initial claims for state unemployment benefits rose by 9,000 to a seasonally adjusted 209,000 for the week ended August 8. Economists had forecast 202,000 claims. Despite the increase, the labor market appears stable, with continuing claims falling by 22,000 to 1.777 million, indicating steady hiring.