Cheap Natural Gas Keeps Producer Prices Steady for July
The Producer Price Index for finished goods was unchanged, seasonally adjusted, for July, according to a Labor Department report (link opens a PDF) released today.
After increasing 0.8% in June primarily because of more expensive gasoline, this latest report reversed a two-month upward trend, which was preceded by two months of price decreases. Analysts had expected a drop, but their 0.3% growth estimate proved too high for July.
Source: Labor Department.
Diving deeper, cheaper energy was the main source of this month's price decrease. Finished energy goods fell 0.2% in price, primarily because of a 3.9% drop in residential natural gas prices. Finished food prices remained unchanged. Excluding these two more volatile goods, producer prices rose 0.1%, again missing analyst estimates of a 0.2% increase.
Moving back along the supply chain, prices for intermediate goods were also unchanged, although crude good prices headed 1.2% higher.
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