(CN) – U.S. wholesale prices increased by only 0.2% in July, another indication of the mild inflation pressures that drove the Federal Reserve to cut interest rates last week.
The producer price index, which measures cost changes of products before they’re sold to the American public, have gone up just 1.7% from a year ago.
Not counting the always volatile food and energy categories, core wholesale prices dropped 0.1% in July but are up 2.1% from a year earlier, according to a Labor Department report released Friday.
Low inflation – along with trade wars and global growth fears – spurred the Federal Reserve to lower interest rates last week for the first time since the start of the recession more than a decade ago.
Inflation has consistently stayed below the Fed’s 2% annual target, as the U.S. economy marked a record 10 consecutive years of growth last month.
The 2.3% increase in wholesale energy costs in July was driven by a 5.2% uptick in gas prices, while food prices edged up 0.2%.
Wholesale goods prices went up 0.4% last month and the cost of services fell 0.1%, pulled down by a 4.3% drop in lodging prices. The wholesale cost of health care services nudged up 0.1%.
The government will report on consumer prices on Tuesday. Like the measure of wholesale prices, the number is expected to stay relatively flat.