US producer inflation exceeds expectations in July, highest in 3 years

US producer price inflation bounced in July to its highest reading since 2022, government data showed Thursday, with an uptick in services costs exceeding that in goods, as policymakers seek to gauge effects from President Donald Trump's tariffs.

The producer price index (PPI) rose 0.9 percent on a month-on-month basis, hotter than analysts expected, after a flat reading in June, said the Department of Labor.

The cost uptick in goods was 0.7 percent while that of services was 1.1 percent -- marking the biggest such jump since March 2022.


An analyst consensus forecast by Briefing.com had expected an overall jump of 0.2 percent.

While the advance was "broad-based" in July, more than three-quarters of it can be traced to services, the Labor Department report said.

And much of this was due to trade services.

But prices for final demand goods also made a big advance, with 40 percent of the July increase traced to foods.

"A quarter of the July advance in the index for final demand goods can be traced to prices for fresh and dry vegetables, which jumped 38.9 percent," the report said.