US Wholesale Prices Stagnate in July as Energy Costs Drop
Washington, Thursday, 13 August 2026.
Unchanged wholesale prices in July signal easing supply chain inflation. Falling energy costs countered service gains, lowering annual inflation to 4.7% and reducing immediate Federal Reserve rate-hike pressures.
Easing Input Pressures for American Businesses
According to data released on August 13, 2026, by the U.S. Bureau of Labor Statistics (BLS), the Producer Price Index (PPI) for final demand was unchanged in July 2026 [1][2]. This flat monthly reading came in below Wall Street expectations, as the Dow Jones consensus had predicted a 0.2% increase [1]. The stagnation follows a revised 0.1% decline in June, which was originally reported as a 0.3% drop [1]. The moderation in producer costs offers a sign of relief for businesses dealing with supply chain pressures and indicates that the pipeline of price increases is beginning to cool [1].
Energy and Food Declines Offset Service Gains
A closer look at the components reveals that a sharp decline in commodity costs drove the flat headline figure. Final demand goods prices fell by 0.7% in July, propelled by a 3.1% drop in energy costs and a 0.9% decrease in food prices [1][2]. Within energy, a 5.7% decline in the gasoline index played a major role in dragging down wholesale costs [1]. Conversely, services prices increased by 0.2% during the month, driven by a 6.5% surge in portfolio management fees and a 0.6% rise in other services, despite a 1.8% decline in transportation and warehousing costs and a 0.1% decrease in trade [1][2].
Divergent Trends in Core and Headline Inflation
On an annual basis, headline wholesale inflation fell eight-tenths of a percentage point to 4.7% for the 12-month period ending in July 2026 [5], down from 5.5% in the prior period. Stripping out volatile food and energy, the core PPI rose by 0.2% month-over-month, coming in slightly under the 0.3% forecast [1][5]. This brought the annual core PPI rate to 4.2% [1][5]. Meanwhile, the core PPI excluding trade services increased by 0.4% [1]. These figures arrive amidst a broader geopolitical backdrop, as a bump in inflation earlier in 2026 had been driven by tariffs and energy price hikes stemming from the war with Iran [1][5].
Shifting Expectations for Federal Reserve Action
The soft PPI report, coming just one day after the Consumer Price Index (CPI) showed a mild 0.1% monthly gain and a 3.4% annual rate, has shifted Wall Street’s expectations for monetary policy [1][5]. Federal Reserve officials have been weighing whether to implement further rate hikes to steer inflation back to their 2% target [1][5]. At the July 28–29, 2026, FOMC meeting, the committee voted 9–3 to hold interest rates steady, representing the first three-way, same-direction dissent since September 2016 [3]. However, with July nonfarm payrolls falling by 23,000 and weekly jobless claims rising to 209,000 for the week ended August 8, traders are now pricing in rate hikes for October or December rather than the upcoming September 15–16 meeting [1][3][4].