Economic Buzz: US producer prices shot up 3.3% in July

Producer prices in the U.S. increased by much more than expected in the month of July, the Labor Department revealed in a report released on Thursday.

The Labor Department said its producer price index for final demand shot up by 0.9 percent in July after coming in unchanged in June.

The report also showed a substantial acceleration by the annual rate of producer price growth, which surged to 3.3 percent in July from an upwardly revised 2.4 percent in June.

The much bigger than expected monthly increase by producer prices came as prices for services jumped by 1.1 percent in July after edging down by 0.1 percent in June.

Prices for trade services shot up by 2.0 percent, while prices for transportation and warehousing services climbed by 1.0 percent and prices for other services rose by 0.7 percent.

The Labor Department said prices for goods also increased by 0.7 percent in July after rising by 0.3 percent in June.

Food prices led the way higher, surging by 1.4 percent in July after inching up by 0.1 percent in June, while energy prices advanced by 0.9 percent for the second straight month.

The report also said core producer prices, which exclude prices for food, energy and trade services, climbed by 0.6 percent in July after coming in unchanged in June.

The annual rate of growth by core producer prices accelerated to 2.8 percent in July from 2.5 percent in June.

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