Wholesale Prices Held Steady in July : Economy: Lower energy, gasoline costs are credited. Economists say data suggest inflation is under control.
WASHINGTON — Plunging gasoline and energy costs helped hold wholesale prices steady in July, offering the latest evidence that inflation remains under control.
The Labor Department said Thursday that its producer price index was unchanged last month after having fallen 0.1% in June, the first decline in eight months.
Better yet, economists said, a drop in raw material prices of 0.8% in July suggests that inflation pressures could be easing further.
The department also said the number of U.S. workers filing new claims for jobless benefits rose last week for the first time in three weeks. But the increase of 14,000 claims, to a seasonally adjusted 335,000, was smaller than expected, suggesting that any softening in the job market might be temporary.
The department said energy prices fell for the third straight month despite greater use of air conditioners. The 2.5% decline is the biggest drop in nearly two years. Gasoline prices plummeted 10.1%, the steepest drop in more than four years. The decline in energy costs easily offset a 1.2% rise in wholesale food prices, the first increase in five months.
The producer price index measures inflation pressures before they reach the consumer. It has been rising at a well-behaved annual rate of 1.8% for the first seven months of 1995.
The figures, matching analysts’ expectations, include a modest 0.2% increase in the so-called core rate of inflation, which factors out volatile energy and food costs.
“The economy clearly did slow, especially in the second quarter. Inventory trimming has reduced demand for goods,” said Eugene Sherman of the Wall Street investment firm M.A. Schapiro & Co. “Looking ahead, there is no reason to see inflation acceleration in the next several months.”
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Producer Prices
Index of finished goods prices, seasonally adjusted. 1982=100.
July 1995: 127.8
Source: Bureau of Labor Statistics
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