US producer inflation cools in July

US producer inflation decelerated in July, according to government figures released on Thursday, as energy costs fell following an earlier rise triggered by the Middle East conflict. The Producer Price Index (PPI) surged 4.7 percent year-on-year, compared to a 5.5 percent increase in June, reported the Department of Labor. However, the PPI remained unchanged month-on-month.

The slowdown was attributed to a decline in energy prices, which decreased by 3.1 percent from the previous month, slightly less than the decline seen in June. This suggests that the energy shock caused by the Iran war was easing. Nevertheless, a long-term solution remains elusive, raising concerns that inflation may persist. Global energy costs have risen significantly since US-Israel strikes against Iran in late February, leading Iran to block access to the Strait of Hormuz, a crucial energy route.

Gasoline prices at US pumps have also increased, putting extra strain on businesses' transportation expenses. Over half of the drop in goods costs in July was due to lower gasoline prices, as stated by the Labor Department. Indices for fresh and dry vegetables, diesel fuel, jet fuel, residual fuels, and thermoplastic resins and materials also decreased, the report added.