Rising wholesale prices outpaced economists’ forecasts last month. The Producer Price Index (PPI), rose by a seasonally adjusted 0.3% in July, according to data released by the Labor Department this morning.
That exceeded the 0.2% increase predicted by economists, Dow Jones noted. It also marked the second consecutive monthly increase in wholesale prices.
July’s PPI gain was driven by increases in the cost of food production due to the lingering drought in the Midwest. Overall food costs increased 0.5% last month, thanks to beef prices, which jumped 3.8% on rising feed costs.
The costs of pharmaceuticals and light trucks rose 0.9% and 1.6%, respectively. Fuel prices declined 0.4% during July, which helped offset rising costs in other categories. During the month, gasoline prices dropped 0.3%.
Decreasing energy costs have helped keep inflation down by falling for five consecutive months.
According to the government, costs for the nation’s producers rose 2.5% over last year. The annual inflation rate for producers hit 0.5% last month.