Business

Wholesale prices unchanged in July

A Chrysler plant in Sterling Heights, Mich. The Commerce Department reported no change in wholesale prices in July.
Paul Sancya/Associated Press
A Chrysler plant in Sterling Heights, Mich. The Commerce Department reported no change in wholesale prices in July.

WASHINGTON — Falling energy prices kept a lid on US wholesale inflation in July after a jump in gasoline boosted prices in June.

The Labor Department reported Wednesday that wholesale prices showed no change last month compared with June, when they rose 0.8 percent. That was the most in nine months.

Energy costs fell 0.2 percent, after June’s 2.9 percent surge. Gasoline prices dropped 0.8 percent, and natural gas costs slid 3.9 percent.

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Excluding volatile food and energy costs, so-called core prices rose just 0.1 percent. Core wholesale prices are up 1.2 percent over the past 12 months, the smallest one-year increase since November 2010.

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Tame inflation has helped consumers increase spending this year despite slow income growth and higher taxes.

Aside from sharp swings in gas prices, consumer and wholesale inflation has barely increased in the past year. Overall wholesale prices rose 2.1 percent in July compared with the previous July.

For July, drug prices rose 1 percent, the largest gain since a 2.5 percent rise in January. Drug companies have been introducing price increases in January and July of each year. Food costs were flat in July as a jump in pork prices was offset by a decline in the cost of fresh vegetables.

On Thursday, the government will report on consumer prices for July, and economists estimate that overall and core prices rose just 0.2 percent.

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For the 12 months ending in June, overall consumer prices rose 1.8 percent and core prices 1.6 percent.

Those levels are below the Federal Reserve’s 2 percent target for inflation. At its last meeting in July, the central bank stated that inflation persistently below 2 percent could pose risks to the economy.