US wholesale inflation at 27-year high
The reading will likely not be welcomed by the Fed, which has been waging a campaign against inflation. Sectoral: Losers | Gainers | BSE Gainers and Losers
By Agencies |
WASHINGTON: US wholesale prices spiked by their largest margin in 27 years in the year to July as inflationary pressures continue to buffet the world's largest economy, a government survey showed Tuesday.
The report showed that the Labor Department's producer price index (PPI), a key gauge of inflation at the wholesale level, rose by a hefty 9.8 percent in the year to July.
That marked the biggest surge in annualized headline prices at the factory and farm gate since a 10.4 percent gain was recorded in June 1981.
The reading will likely not be welcomed by the Federal Reserve, which has been waging a campaign against inflationary pressures, but Fed policymakers expect inflationary pressures to ebb in coming months, especially as oil prices have cooled markedly in recent weeks.
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On a monthly basis, overall prices rose by a more-than-expected 1.2 percent in July against market forecasts which had predicted a rise of 0.4 percent. Headline PPI had risen 1.8 percent in June.The core PPI rate, which strips out volatile energy and food costs, increased by a more-than-anticipated 0.7 percent in the month to July or 3.5 perce over the past 12 months. Economists had predicted a lesser core rate increase of 0.2 percent for the month.
The core rate had increased a mild 0.2 percent in the month to June.
Wholesale food costs moderated in July from the prior month to show a gain of 0.3 percent and while energy prices also eased they remained relatively high, posting a gain of 3.1 percent in the month to July.
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The Fed left its key interest rate anchored at 2.0 percent earlier this month, in part as it adopted a wait-and-see approach to inflation risks.Download
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