Wholesale Prices Increased Only Slightly in June

A farmer plants soybeans in a field in Springfield, Neb, on May 23, 2019. (AP Photo/Nati Harnik)

(CN) – Wholesale prices increased by only 0.1% in June, the same rate as consumer prices, as the Federal Reserve looks ready to slash interest rates this month amid tame inflation pressures.

The producer price index, which measures costs before goods reach consumers, is up 1.7% from a year ago, the smallest annual increase since January 2017.

Excluding the volatile food, energy and trade services categories, core wholesale prices stayed flat last month and rose 2.1% from June 2018, the Labor Department reported Friday.

Wholesale goods prices dropped 0.4% while services prices jumped 0.4%. Food prices increased 0.6% as wholesale energy prices dropped 3.1%.

Federal Reserve Chairman Jerome Powell signaled Wednesday that the central bank is likely to cut short-term interest rates at its July 30 meeting because inflation has stayed below the 2% annual target.

President Donald Trump and others have called for a rate cut to boost economic growth, as the U.S. economy marks 10 consecutive years of expansion.

On Thursday, the Labor Department reported that consumer prices also increased by just 0.1% in June, and 1.6% from a year ago.

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