Producer prices were mostly lower in July. The producer price index for final demand fell 0.1 percent as the goods index fell 0.1 percent and services fell 0.2 percent. Within the goods category, food prices were unchanged in July and energy prices fell 0.3 percent. Excluding food and energy from final goods, prices fell 0.1 percent for the month.
On the services side, trade-services prices fell 0.5 percent, transportation and warehousing prices dropped 0.8 percent, and other final-services prices rose 0.2 percent. Over the past 12 months, producer prices for all final goods and services were up 1.9 percent, as was the index for final goods and services excluding food and energy.
At earlier stages of production, the price index for intermediate goods fell 0.1 percent in July as food products dropped 0.5 percent while energy products rose 0.8 percent. Excluding both from the intermediate-goods price index, prices fell 0.3 percent for the month.
At the beginning of the production process, prices for unprocessed goods fell 0.4 percent, with food jumping 2.4 percent and energy dropping 5.1 percent. The price index for unprocessed goods excluding food and energy goods rose 1.2 percent in July. Prices for such inputs into the production process (i.e., commodities) tend to be extremely volatile month to month.
Among the major types of products and services, the producer price index for personal consumption fell 0.1 percent in July and is up 1.9 percent from a year ago. Prices of goods for personal consumption fell 0.2 percent, and prices for services were unchanged for the month. The price index for capital equipment was unchanged in July and is up 0.9 percent from a year ago.
Overall, the producer price report suggests very modest price pressures in July.
The data on weekly initial claims for unemployment insurance suggest the labor market remains robust. Claims rose 4,000 to 244,000 for the week ending August 5. The four-week average came in at 241,000, down from 242,000 in the prior week. Claims have been below 300,000, a level considered low by historical measures, for 125 consecutive weeks, the best run since the early 1970s. As a share of employment, claims are at all-time lows.
The economy continues on a moderate growth path with few signs of building price pressures. The labor market remains the cornerstone of the expansion, providing support for consumer spending.