Wholesale inflation accelerates in July for first time in 13 months

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Strategic Wealth Partners investment strategist Luke Llyod on what to expect from the July PPI and discusses 2Q earnings. 

Inflation at the wholesale level rose more than expected in July, ending a year-long streak of steady declines in consumer prices.

The Labor Department said Friday that its producer price index, which measures inflation at the wholesale level before it reaches consumers, climbed 0.3% in July from the previous month. On an annual basis, prices are up 0.8%. It marked the first increase in headline inflation since June 2022. 

Those figures are both higher than the 0.7% headline increase and 0.2% monthly figure forecast by Refinitiv economists.

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There were other signs of underlying inflationary pressures within the economy in the report.

Excluding the more volatile measurements of food and energy, so-called core inflation rose 0.3% for the month – a reversal from the 0.1% decline in June. The figure was up 2.4% on a 12-month basis.

Additionally, the services index climbed 0.5%, the biggest jump since August 2022, the Labor Department said in the report. About 40% of the increase can be traced to a 7.6% rise in prices for portfolio management, according to the report. The cost for machinery and vehicle wholesaling; outpatient care; chemicals and allied products wholesaling; securities brokerage, dealing and investment advice and transportation of passengers also moved higher. 

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«With financial market performance strong, it's not surprising that asset managers are raising their prices as clients have generally seen their holdings improve,» said Quincy