AFP, Washington :
US producer prices were down unexpectedly in July, reversing gains made in the previous two months, according to official figures released Friday.
The Labor Department said its producer price index for final demand fell 0.4 percent, after having risen 0.5 percent in June and 0.4 percent in May.
Analysts had expected the index, which measures price changes for goods, services and construction and can be indicative of inflation, to remain flat.
Blerina Uruci of Barclays said that June’s figures had shown a gradual firming of prices in domestic production.
“However, the weakness in the July report brought PPI final demand back into deflation,” she wrote in a research note.
Markets have been on tenterhooks, awaiting signs of a return to inflation in the US economy which could spur monetary policy makers to raise interest rates.
After announcing a course of rate hikes for the year, the US Federal Reserve has instead chosen to wait and see.
US producer prices were down unexpectedly in July, reversing gains made in the previous two months, according to official figures released Friday.
The Labor Department said its producer price index for final demand fell 0.4 percent, after having risen 0.5 percent in June and 0.4 percent in May.
Analysts had expected the index, which measures price changes for goods, services and construction and can be indicative of inflation, to remain flat.
Blerina Uruci of Barclays said that June’s figures had shown a gradual firming of prices in domestic production.
“However, the weakness in the July report brought PPI final demand back into deflation,” she wrote in a research note.
Markets have been on tenterhooks, awaiting signs of a return to inflation in the US economy which could spur monetary policy makers to raise interest rates.
After announcing a course of rate hikes for the year, the US Federal Reserve has instead chosen to wait and see.
