Washington – Falling food prices helped keep inflation at the wholesale level contained in July. But a relentless rise in energy prices was expected to make the relief short-lived.
The Labor Department reported that wholesale prices increased 0.1 percent in July, far below the 0.5 percent jump in June.
The improvement reflected a retreat in food prices, which had surged 1.4 percent in June only to decline by 0.3 percent in July.
Core wholesale inflation, which excludes energy and food, was also well-behaved in July, posting an unexpected decline of 0.3 percent, the first drop in nine months.
That development sent stock prices soaring as investors believed it could provide further support for those Federal Reserve officials arguing that inflation is beginning to slow as the economy slows.
But private economists were not as convinced, noting that energy prices were up sharply and the decline in the core rate of inflation was heavily influenced by special factors.
