Washington, Aug 11 (AP) Wholesale prices in the United States picked up in July yet still suggested that inflationary pressures have eased this year since reaching alarming heights in 2022.

The Labor Department reported Friday that its producer price index — which measures inflation before it hits consumers — rose 0.8 per cent last month from July 2022. The latest figure followed a 0.2 per cent year-over-year increase in June, which had been the smallest annual rise since August 2020.

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On a month-to-month basis, producer prices rose 0.3 per cent from June to July, up from no change from May to June. Last month's increase was the biggest since January.

An increase in services prices, especially for management of investment portfolios, drove the month-to-month increase in wholesale inflation. Wholesale meat prices also rose sharply in July.

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Analysts said the July rise in wholesale prices, from the previous month's low levels, still reflects an overall easing inflation trend.

The figures the Labour Department issued Friday reflect prices charged by manufacturers, farmers and wholesalers. The figures can provide an early sign of how fast consumer inflation will rise in the coming months.

Since peaking at 11.7 per cent in March 2022, wholesale inflation has steadily tumbled in the face of the Federal Reserve's 11 interest rate hikes.

Excluding volatile food and energy prices, "core'' wholesale inflation rose 2.4 per cent from July 2022, the same year-over-year increase that was reported for June. Measured month to month, core producer prices increased 0.3 per cent from June to July after falling 0.1 per cent from May to June.

On Thursday, the government reported that consumer prices rose 3.3 per cent in July from 12 months earlier, an uptick from June's 3 per cent year-over-year increase. But in an encouraging sign, core consumer inflation rose just 0.2 per cent from June, matching the smallest month-to-month increase in nearly two years.

By all measures, inflation has cooled over the past year, moving closer to the Fed's 2 per cent target level but still remaining persistently above it.

The moderating pace of price increases, combined with a resilient job market, has raised hopes that the Fed may achieve a difficult “soft landing”: Raising rates enough to slow borrowing and tame inflation without causing a painful recession.

Rubeela Farooqi, chief US economist at High Frequency Economics, noted that Friday's report showed producer prices running “above expectations.”

But she added that “the year-on-year changes still show headline producer prices below and core heading towards 2 per cent."

“The July data alone don't necessarily signal a change in the trend,” Farooqi said.

Farooqi and many other economists and market analysts think the Fed's most recent rate hike in July could prove to be its last.

Before the Fed next meets September 19-20 to decide whether to continue raising rates, it will review several additional economic reports.

They include another monthly report on consumer prices; the latest reading of the Fed's favoured inflation gauge; and the August jobs report.

Inflation began surging in 2021, propelled by an unexpectedly robust bounce-back from the 2020 pandemic recession.

By June 2022, consumer prices had soared 9.1 per cent from a year earlier, the biggest such jump in four decades.

Much of the price acceleration resulted from clogged supply chains: Ports, factories and freight yards were overwhelmed by the explosive economic rebound.

The result was delays, parts shortages and higher prices.

But supply-chain backlogs have eased in the past year, sharply reducing upward pressure on goods prices. Prices of long-lasting manufactured goods actually dipped in June. (AP)

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)