WASHINGTON: Falling energy prices kept a lid on U.S. wholesale inflation in July after a jump in gasoline boosted prices in June. The Labor Department reported Wednesday that wholesale prices showed no change last month compared with June, when they rose 0.8 percent. That was the most in nine months.
Energy costs fell 0.2 percent, after June’s 2.9 percent surge. Gasoline prices dropped 0.8 percent, and natural gas costs slid 3.9 percent.
Excluding volatile food and energy costs, so-called core prices rose just 0.2 percent. Core wholesale prices are up 1.2 percent over the past 12 months, the smallest one-year increase since November 2010.
Aside from sharp swings in gas prices, consumer and wholesale inflation has barely increased in the past year. Overall wholesale prices rose 2.1 percent in July compared with the previous July.
For July, drug prices rose 1 percent, the largest gain since a 2.5 percent rise in January. Drug companies have been introducing price increases in January and July of each year. Food costs were flat in July as a jump in pork prices was offset by a decline in the cost of fresh vegetables.
Chairman Ben Bernanke and other Federal Reserve Bank officials have said the central bank could start slowing its bond purchases later this year. Some economists think that could begin after the Fed’s next meeting in September. Most expect the slowdown to be gradual. New bond purchases might not end until mid-2014 — and only then if the unemployment rate has dropped to around 7 percent.
Unemployment fell in July to 7.4 percent from 7.6 percent in June. The July figure was a 4½-year low, but it was still well above the 5 percent to 6 percent range that economists associate with a healthy economy.