Producer prices in the US rose less than expected in July, as rising costs of goods were offset by cheaper services, suggesting that inflation continued to moderate.
The producer price index (PPI) for final demand rose 0.1% last month after rising 0.2% in June, based on data from the Labor Department's Bureau of Labor Statistics on Tuesday. Economists interviewed by Reuters had forecast a PPI increase of 0.2%.
In the 12 months to July, PPI rose 2.2% after climbing 2.7% in June.
Slowing inflation and a cooling labor market have led financial markets to expect that the Federal Reserve will begin an easing cycle in September. With the US central bank now increasingly worried about the weakness of the labor market, after the unemployment rate jumped to a near three-year high of 4.3% in July, a rate cut of 50 basis points cannot be ruled out.
The Fed has kept its benchmark overnight interest rate in the current 5.25%-5.50% range for one year, after raising it by 525 basis points in 2022 and 2023.
US stock futures were mostly higher on Tuesday as Wall Street digested lower-than-expected inflation data and awaited updates on consumer prices. Futures linked to the S&P 500 rose 0.6%, while Nasdaq futures dominated by the technology sector rose 0.9%. Dow Jones Industrial Average futures rose 0.3%.
The US dollar index continued to shrink 0.11% against six major currencies at a trading level of 102.850.
