Stocks get boost as U.S. July wholesale prices rose 0.2%; slower than expected

Aug. 13 (UPI) -- July wholesale prices rose slower than expected and inched ever closer to the year-to-year Federal Reserve benchmark, the Bureau of Labor Statistics reported Tuesday.

The July producer price index, a key indicator of wholesale inflation, grew by grew by 0.1% in July, the BLS report said.

The Labor Department said the producer price index minus more volatile sectors of food and energy held steady for the month and core PPI minus food, energy and trade services rose 0.3%.

Dow Jones economists had predicted a 0.2% increase in both all-items PPI and the core reading.

The PPI increase over the past 12 months was 2.2% close to the 2% federal standard and significantly down from the 2.7% in June.

"The July rise in the index for final demand can be attributed to prices for final demand goods, which moved up 0.6%," BLS said. "In contrast, the index for final demand services fell0.2%."

Stocks opened higher on the data with the Dow Jones Industrial Average up 171.15 points or 0.43%, the S&P 500 up 0.98% and the Nasdaq Composite soaring 1.59% in early trading.

BLS said nearly 60% of that increase could be traced to increases in energy, which moved up. 1.9%. The indexes for diesel fuel, meats, jet fuel, fresh fruits and melons, and basic organic chemicals all decreased.

Services prices saw their biggest decrease since March 2023 by tumbling 0.2% in July. The drop in trade services drove the decrease, falling 1.3%. Service prices -- minus trade, and transportation warehousing -- rose 0.3%.

In other notes of interest, prices for machinery and vehicle wholesaling decreased by 4.1%. Prices for food and alcohol retailing, automobiles retailing, automotive fuels and lubricants retailing, desktop and portable devices software publishing, and physician care all dropped.

Prices for portfolio management increased by 2.3%. The price for chemical and allied products wholesaling for truck transportation of freight increased.