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U.S. July Wholesale Prices Stagnated as Service Costs Fell

Published 09/08/2018, 10:44 pm
Updated 10/08/2018, 12:29 am
© Bloomberg. An employee moves an order of walls on a forklift at the Blueprint Robotics facility in Baltimore, Maryland, U.S., on Tuesday, April 10, 2017. The Blueprint factory is one of the first in the U.S. to use robots to help manufacture modular homes, and these robots are creating opportunities for people who wouldn't otherwise be a part of the homebuilding industry. Photographer: Andrew Harrer/Bloomberg

© Bloomberg. An employee moves an order of walls on a forklift at the Blueprint Robotics facility in Baltimore, Maryland, U.S., on Tuesday, April 10, 2017. The Blueprint factory is one of the first in the U.S. to use robots to help manufacture modular homes, and these robots are creating opportunities for people who wouldn't otherwise be a part of the homebuilding industry. Photographer: Andrew Harrer/Bloomberg

(Bloomberg) -- U.S. wholesale prices were unchanged in July as costs for services fell for the first time this year, a Labor Department report showed Thursday in Washington.

Key Takeaways

The figures, which measure wholesale and other selling prices at businesses, indicate price pressures in the production pipeline were fairly contained at the start of the second half of 2018. While U.S. demand is rising, there’s concern about higher materials costs and persistent uncertainty as the Trump administration imposes tariffs and other nations including China retaliate.

The cost of goods rose 0.1 percent from June, bringing the annual increase to 4.5 percent -- the biggest gain since December 2011, the report showed. Services prices decreased 0.1 percent from the prior month, reflecting lower margins at wholesalers and retailers. Margins for fuels and lubricants retailing dropped 12.7 percent, while cost gauges for machinery and equipment parts wholesaling, hospital outpatient care, and airline passenger services also decreased.

While the consumer price index due Friday is considered a more important indicator of inflation, data on producer prices help provide insights into the direction of input costs that businesses are facing.

Other Details

  • Excluding the volatile categories of food, energy, and trade services, producer costs increased 0.3 from June, similar to the prior month
  • Energy prices decreased 0.5 percent from the prior month; food costs fell 0.1 percent following a 1.1 percent drop the prior month
  • Prices for final demand trade services, which measure margins received by wholesalers and retailers, fell 0.8 percent

(Updates with more details from report under Key Takeaways; adds chart.)

©2018 Bloomberg L.P.

© Bloomberg. An employee moves an order of walls on a forklift at the Blueprint Robotics facility in Baltimore, Maryland, U.S., on Tuesday, April 10, 2017. The Blueprint factory is one of the first in the U.S. to use robots to help manufacture modular homes, and these robots are creating opportunities for people who wouldn't otherwise be a part of the homebuilding industry. Photographer: Andrew Harrer/Bloomberg

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