U.S. producer prices unexpectedly fell in July on declining costs for services and energy products, pointing to a tame inflation environment that could make it difficult for the Federal Reserve to raise interest rates.
The Labor Department said on Friday its producer price index for final demand dropped 0.4 percent last month, the first decline since March and the largest since September 2015. It increased 0.5 percent in June.
In the 12 months through July, the PPI slipped 0.2 percent after rising 0.3 percent in the 12 months through June. Economists polled by Reuters had forecast the PPI edging up 0.1 percent last month and gaining 0.2 percent from a year ago.
A strong dollar and cheaper oil continue to keep price pressures muted, leaving inflation running persistently below the Fed's 2 percent target.