US producer prices fall in July; weekly jobless claims rise

US producer prices unexpectedly fell in July amid a drop in the cost for energy products and underlying producer inflation appears to be on a downward trend, while jobless claims rose for a second straight week in a labor market that remains tight.

The producer price index for final demand declined 0.5% last month, the first negative monthly reading since April 2020, the Labor Department said on Thursday. The PPI climbed 1.0% in June. In the 12 months through July, it increased 9.8% after advancing 11.3% in June.

Economists polled by Reuters had forecast the PPI would rise 0.2% in July and increase 10.4% on a year-on-year basis. There was a drop of 1.8% in goods prices after a gain of 2.3% in June. A 16.7% fall in gasoline prices accounted for 80% of that decline. The prices of diesel fuel, liquefied petroleum gas and residential natural gas also fell sharply.