Rise in US factory gate prices slows in July

Factory gate prices surprised slightly to the downside last month, but some economists said it was a tad too soon to call a peak in producer prices as the recent climb in crude oil prices continued to feed through.

So-called final demand prices in the US were flat in July when compared with the prior month, rising by 3.3% year-on-year.

That was down from the 3.4% clip observed in June before and economists' forecasts for such gains to be maintained.

At the 'core' level, which excludes food, energy and trade services, prices were up by 0.3% month-on-month and by 2.8% on year, with the latter unchanged from June and as expected by economists.

"This is marginally below the 2.8% cycle peak, seen in March, but new highs are coming. Core PPI inflation is being pushed higher by pass-through from higher oil prices, which likely has a bit further to run; expect a y/y peak at about 3% in the early fall, and then a clear decline through the winter," said Ian Shepherdson at Pantheon Macroeconomics.

Prices for final demand goods increased by 0.1% month-on-month, despite declines in food and energy prices of -0.1% and -0.5%, respectively.

Total final demand services prices slipped by 0.1% on the month.