WASHINGTON — U.S. wholesale prices ticked up just 0.2 percent in July, the latest sign that inflationary pressures are largely in check.

The Labor Department said Friday that the producer price index — which measures price changes before they reach the consumer — increased 1.7 percent last month compared with a year ago, the same as June. Excluding the volatile food and energy categories, wholesale prices fell 0.1 percent in July and rose 2.1 percent from a year earlier.

Inflation is muted, even as the economy has entered its 11th year of expansion and the unemployment rate has fallen to 3.7 percent, near a five-decade low. Yet wages are rising only modestly and many businesses are reluctant to raise prices in the face of online and global competition.

Federal Reserve Chairman Jerome Powell cited low inflation last month as a key reason the Fed cut short-term interest rates.

The Fed targets an inflation rate of 2 percent as a hedge against deflation, a destabilizing fall in prices and wages. Yet price gains have mostly missed that target since the Fed adopted it seven years ago. With wage growth weak, companies haven’t been forced to lift prices to offset higher pay.

In July, wholesale inflation was driven largely by higher energy costs, including a 5.2 percent increase in gas prices and an 8 percent rise in the cost of home heating oil.

Hotel room prices fell 4.3 percent last month and physician care services dropped 0.5 percent. Food prices ticked up 0.2 percent, led by a 10.3 percent jump in the price of corn.

Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(0) comments

Welcome to the discussion.

Keep it clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Engage ideas. This forum is for the exchange of ideas, insights and experiences, not personal attacks. Ad hominen criticisms are not allowed. Focus on ideas instead.
TURN OFF CAPS LOCK.
Don't threaten. Threats of harming another person will not be tolerated.
Be truthful. Don't knowingly lie about anyone or anything.
Be nice. No racism, sexism or any sort of -ism that is degrading to another person.
No trolls. Off-topic comments and comments that bait others are not allowed.
No spamming. This is not the place to sell miracle cures.
Say it once. No repeat or repetitive posts, please.
Help us. Use the 'Report' link on each comment to let us know of abusive posts.