In short
Rubbish Talk rates ABC News/AP's claim that wholesale "gas, food costs fall" a 4/10 because the same report shows monthly producer prices were flat, not falling, and gas prices had already reversed higher by early August, a risk the headline buries.
The Verdict
Selective. The year-over-year slowdown in the piece is real and the outlet reports it straight, but the headline's "costs fall" framing oversells a monthly PPI print that was actually unchanged, and it omits the gas-price reversal and weak jobs backdrop that complicate the good-news read.
What actually happened
The Labor Department's Producer Price Index for final demand rose 4.7% year-over-year in July, down from 5.5% in June, with core PPI (excluding food and energy) easing to 4.2% from 4.7%. The Labor Department's producer price index rose 4.7% in July from a year ago, down from a much larger 5.5% increase in June, and on a monthly basis, wholesale prices were unchanged from June to July, after they ticked down 0.1% the previous month. Gas prices had fallen earlier in July, unwinding part of an Iran-war-linked spike, but the article notes they rose again in late July and early August.
Key facts
- Headline PPI: +4.7% YoY in July, down from +5.5% in June.
- Monthly PPI: 0.0% June to July, following -0.1% the prior month, meaning "unchanged," not "falling."
- Core wholesale inflation (excluding food and energy) dropped to 4.2% in July compared with a year earlier, down from 4.7% in June, and on a monthly basis core prices rose 0.2%, down from 0.4% the previous month.
- After falling in early July, gas prices then rose later that month and in early August, threatening to push inflation back up when August figures are reported.
- Consumer prices have risen faster than wages for the past four months.
- Employers cut jobs in July, a sign of economic weakness.
What to watch for
Watch the August PPI print for a gas-driven bounce back up, since the reversal was already underway before this report was published. Also watch whether the PCE index due later this month, which pulls in PPI healthcare and financial-services components, confirms the cooling or shows stickiness the headline glossed over.
