A key measure of wholesale inflation rose less than expected in July, opening the door further for the Federal Reserve to start lowering interest rates.
The producer price index, which measures selling prices that producers get for goods and services, increased 0.1% on the month, the Labor Department's Bureau of Labor Statistics reported Tuesday. Excluding volatile food and energy components, the core PPI was flat.
Economists surveyed by Dow Jones had been looking for an increase of 0.2% on both the all-items and the core readings.
A further core measure that also excludes trade services showed a rise of 0.3%.
On a year-over-year basis, the headline PPI increased 2.2%, a sharp drop from the 2.7% reading in June.
Stock market futures rose following the news while Treasury yields moved lower.
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