July 2026 PPI Flat as Goods Drop and Underlying Inflation Hits 4.7%
U.S. producer prices were flat in July 2026 as services rose 0.2% and goods fell 0.7%, while headline and core annual inflation both climbed to 4.7% annually.
Summary
The Bureau of Labor Statistics reported on August 13 that the seasonally adjusted Producer Price Index for final demand was unchanged in July 2026, after falling 0.1% in June and rising 0.5% in May. Final demand increased 4.7% unadjusted over 12 months. Services rose 0.2% and construction climbed 2.2%, offsetting a 0.7% goods decline. Final demand excluding foods, energy, and trade services rose 0.4% monthly and 4.7% annually, accelerating from June’s 0.1% increase.
Services excluding trade, transportation, and warehousing increased 0.6%, led by a 6.5% portfolio management surge, while transportation and warehousing fell 1.8% and trade services slipped 0.1%. Goods energy dropped 3.1% and foods fell 0.9%, while goods excluding both rose 0.1%. Gasoline declined 5.7%, truck freight prices fell 1.8%, and motor vehicles and equipment rose 0.3%.
Intermediate processed goods fell 0.6%, unprocessed goods dropped 1.8%, and services rose 0.5%, but their annual increases remained 9.9%, 7.1%, and 5.1%, respectively. Diesel fell 6.7%, crude petroleum dropped 11.9%, lumber rose 5.0%, and aluminum scrap gained 5.8%. Production flow indexes moved 0.6% for stage 4, negative 0.1% for stage 3, negative 1.0% for stage 2, and negative 0.1% for stage 1, with annual increases of 6.7%, 5.8%, 7.6%, and 9.7%. March through June figures were revised; August PPI is due September 10 at 8:30 a.m. ET.
Positives
- Final demand was unchanged in July as falling goods prices fully offset increases in services and construction.
- Final demand goods fell 0.7%, including declines of 3.1% for energy, 0.9% for food, and 5.7% for gasoline.
- Crude petroleum dropped 11.9%, diesel fell 6.7%, and truck freight prices declined 1.8%, easing several production and distribution costs.
- Stage 2 intermediate demand fell 1.0%, driven by a 2.8% drop in goods inputs.
Risks & concerns
- Final demand and the index excluding foods, energy, and trade services both increased 4.7% over 12 months.
- The underlying final demand measure accelerated to 0.4% in July from 0.1% in June.
- Final demand construction rose 2.2%, while services excluding trade, transportation, and warehousing increased 0.6%.
- Intermediate processed goods, unprocessed goods, and services remained 9.9%, 7.1%, and 5.1% higher over 12 months.
- Stage 1 through stage 4 intermediate demand posted annual inflation ranging from 5.8% to 9.7%.
