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Producer prices—what businesses charge each other for goods or services—rose at a 9.8-percent annual rate in July, their slowest increase since last October, the U.S. labor department reported.
June’s increase was 11.3 percent.
On a monthly basis, the producer price index (PPI) fell 0.5 percent during July, the sharpest one-month slide since April 2020 when the COVID War was getting underway.
The core PPI, which excludes food, fuel, and suppliers’ margins, was up 5.8 percent last month, compared to a 6.4-percent gain in June.
TREND FORECAST: While the mainstream media played down the rate rise, it was still up 5.8 percent. Moreover, it is hitting consumers hard since the PPI’s food-related prices rose more sharply in July than in June, with basics such as eggs and vegetables becoming more costly.
Combined with news that consumer prices increased at a slower pace in July than the month before (see “Inflation Slowed in July” in this issue), the PPI’s deceleration does indicate that overall inflation is slowing down, it still has a lot of steam and will not reverse until—and if—the Federal Reserve sharply raises interest rates to dramatically slow down the economy… which is not in the cards at this time.