The 0.3% increase in the producer price index (PPI) between June and July was higher than expected.
“PPI inflation surprised to the upside in July,” High Frequency Economics chief economist Rubeela Farooqi wrote in a note to clients.
But headline producer prices are well below 2%, he said, adding that annual changes in measures of core inflation are also nearing target.
Economists surveyed by MarketWatch had expected a slightly lower headline figure of 0.2%.
Services prices increased 0.5% between June and July, the largest monthly increase since August 2022, driven by a jump in commercial services, as well as transport and storage services.
Meanwhile, goods prices rose 0.1% from the previous month.
The Federal Reserve (Fed, central bank) is evaluating the possibility of another interest rate hike in September to reduce inflation.
While producer prices have fallen rapidly since last year, progress has been slower on consumer inflation.
Many analysts and traders expect the Federal Reserve to hold rates steady in its next decision, as the effect of the hikes spills over into the broader economy.
FOUNTAIN: With information from AFP
