Source: Sharecast
Last month's wholesale price inflation print was also well and truly ahead of the upwardly revised 2.4% increase in June and forecasts of 2.5%.
On a monthly basis, producer prices rose 0.9% against June's flat reading, also ahead of the 0.2% increase expected by economists. The BLS also noted that within final demand, more than three-quarters of the broad-based advance in July was linked to final demand services, which rose 1.1%, while prices for final demand goods increased 0.7%.
So-called core PPI was also up 0.9% in July, compared to forecasts of a 0.2% rise, while the annual core rate came to 3.7%, ahead of expectations of a 2.9% increase.
July's PPI reading follows Tuesday's consumer price index, which revealed US consumer prices edged higher last month, but the pace of inflation showed signs of easing, offering a modest reprieve for both the Federal Reserve and markets.
Headline CPI rose by 0.2% month-on-month, down from June's 0.3% increase, while on an annual basis, inflation held steady at 2.7%, suggesting that while underlying pressures remained, particularly in shelter and services, the broader inflation picture may be stabilising. However, core CPI, which strips out volatile food and energy prices, climbed 0.3% in July, accelerating from June's 0.2% increase and lifting the year-on-year rate to 3.1%, up from 2.9%.
Reporting by Iain Gilbert at Sharecast.com