The rising producer prices in the United States in July, primarily driven by price hikes in certain service categories, indicate the unpredictable nature of inflation’s return to the desired level.
According to economists from Oxford Economics, the recent data suggests that PPI inflation is approaching pre-pandemic levels, albeit at a slower pace in the latter half of the year compared to the first half. However, despite these reassuring figures, Federal Reserve officials are likely to adopt a cautious approach, closely monitoring whether the surge in service prices observed last month persists in the months ahead.