The U.S. economy faces renewed concerns about inflation as the Producer Price Index (PPI) for final demand has shown an unexpected surge in July, outpacing market expectations.
Producer Inflation Rebounds
The PPI recorded a 0.8% annual rise, bouncing back from a revised higher 0.2% in June and surpassing the projected 0.7% increase, the Bureau of Labor Statistics said Friday.
On a monthly basis, the PPI's pace of increase also quickened, growing by 0.3% in July, a notable increase from the revised flat reading seen in the previous month.
The core PPI index, which excludes the more volatile components of food and energy, maintained a year-on-year increase of 2.4% for July, matching the previous month's figure but exceeding market expectations, which were at 2.3%.
Similarly, the core PPI's monthly increase edged up to 0.3%, compared to the revised 0.1% drop seen in June.
This higher-than-expected increase in the PPI inflation comes just a day after the Consumer Price Index (CPI) report for July, which indicated a moderate increase in the headline annual inflation rate from 3% to 3.2%, albeit below the predicted 3.3%.
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