US producer inflation highest in three years in July

US producer price inflation bounced in July to its highest reading since 2022, data showed on Thursday, with underlying signs that businesses are facing pressures from President Donald Trump's tariffs.

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The rise in services costs exceeded that in goods, contributing to a markedly larger advance than analysts expected.

But economists noted that the headline increase might be overstated - boosted by a range of volatile factors - even as there are also price gains in goods exposed to tariffs.

The producer price index (PPI) rose 0.9 per cent on a month-on-month basis after a flat reading in June, said the Department of labour.

A Briefing.com analyst consensus forecast expected a much smaller jump of 0.2 per cent.

The PPI measures changes in prices that producers pay, and the report is seen by some as a bellwether for what consumers could face in the months ahead if firms choose to pass on more costs. Businesses have been grappling with Trump's sweeping tariffs after he targeted most trading partners with a IO-percent levy this year, alongside steeper levels on sectors like steel and aluminium.

The latest numbers took the overall PPI figure to 3.3 per cent, said the Bureau of labour Statistics.

The cost uptick in goods was 0.7 per cent while that of services was 1.1 per cent - marking the biggest such jump since March 2022 as well.