WASHINGTON — Inflation was a no-show in July and likely will stay away for months, giving the Federal Reserve room to keep invigorating the economy with record-low interest rates.
That was the message economists took from a report Tuesday that wholesale prices fell over the past 12 months by the sharpest amount in 62 years of record-keeping — the latest sign that inflation is posing no threat.
“In this economy, there really is no pricing power at all,” said Brian Bethune, economist at IHS Global Insight.
The Labor Department said wholesale prices sank 0.9 percent in July, triple the decline that economists had expected. Over the past year, wholesale prices have dropped 6.8 percent. That’s the biggest drop in records dating to 1947.
A steep decline in energy prices drove the overall drop. The so-called “core” inflation rate for wholesale goods — excluding food and energy — fell 0.1 percent in July.
