US producer inflation slows as pricing power diminishes
U.S. producer prices increased less than expected in July as the cost of services fell by the most in nearly 1-1/2 years amid signs of diminishing pricing power for businesses, evidence of waning inflation pressures that reinforced hopes of an interest rate cut next month. The report from the Labor Department on Tuesday also showed favorable readings for most of the components that go into the calculation of the personal consumption expenditures (PCE) price indexes, the inflation measures tracked by the Federal Reserve for monetary policy. A surge in the unemployment rate to a near three-year high of 4.3% in July fanned fears in financial markets of a recession, which have been largely dismissed by economists.
