July PPI Declines 0.9%; Core Rate Falls 0.1%

WASHINGTON — The U.S. July PPI was down 0.9% and declined 0.1% in core, for over-the-year rates of a 6.8% drop overall and a 2.6% rise in core. Before rounding, core PPI was off 0.116%.

June PPI was up big at plus 1.8%/plus 0.5%. The reversal was no surprise as energy posted a 2.4% decline and food posted a 1.5% drop in July, offsetting their prior month's surges.

Core PPI was held down by a 1.7% drop in the price of cars, a 0.7% decline in light trucks, a 1.5% slide in computers, a 1.1% fall in cleaning products, and a 0.2% dip in civilian aircraft. The Labor Department also said the core price retreat was broad-based.

A Bureau of Labor Statistics economist said the PPI survey date missed the "Cash for Clunkers" program's timing, so it is possible that auto prices will rise in the August report.

Intermediate and Crude prices also fell, printing down 0.2% and 4.5% in July respectively. These also reversed their June surges, but appear to be troughing.

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