WASHINGTON — Producer prices rose 0.2% in July as a decline in energy costs didn't immediately filter through the rest of the economy.
The Labor Department said Wednesday that prices rose on a seasonally adjusted basis in July as a surge from tobacco offset a decline in energy costs. Gasoline prices fell 2.8% while tobacco shot up 2.8%, the biggest gain in more than two years. The cost of light trucks, pharmaceuticals and beef and veal also played a role in the advance.
Excluding food and energy, core producer prices rose 0.4%, the largest monthly rise since January.
Economists polled by MarketWatch had expected a 0.1% monthly rise and a 0.2% gain in core producer prices.
Producer prices of intermediate goods such as flour or cotton yarn, which have been processed but require further processing, rose 0.2%, while those of crude goods such as grains, livestock and crude petroleum, which haven't been fabricated or manufactured and aren't sold to consumers, fell.
Core intermediate goods, to which the Federal Reserve pays close attention for signs of inflation, rose 0.2% in July, the smallest advance since September.
Taken over 12 months, the producer price data capture the difficulty companies have had in passing along rising commodity prices. Crude prices have jumped 22.6%, while intermediate prices have gained 11.6%. Producer prices of finished goods have gained 7.2%.
Consumer price data are due out today. Through June, the consumer price index was up 3.6% on a year-on-year basis.
Goldstein writes for MarketWatch.com/McClatchy.