US Producer Prices Come In Softer Than Expected, Adding to Fed Rate Cut Bets

July’s producer price data showed inflation pressures cooling more than economists anticipated, adding fresh evidence for the Federal Reserve’s next policy decision.

PPI Readings Miss Forecasts

Core Producer Price Index rose 0.2 percent month-over-month, below the 0.3 percent forecast, though matching the previous month’s pace. Meanwhile, the headline PPI came in flat at 0.0 percent, well under the expected 0.2 percent gain and a notable slowdown from last month’s 0.3 percent rise.

Yesterday’s CPI Also Eased

The softer producer prices follow Wednesday’s consumer inflation report, which landed close to expectations. Headline CPI rose 0.1 percent monthly and 3.4 percent annually, while core inflation increased 0.2 percent, easing to 2.5 percent yearly.

Together, the reports strengthen expectations that inflation pressures are moderating, giving the Federal Reserve more room to consider a rate cut in September.