The Clap
The Producer Price Index (PPI), an indicator that shows the average change in selling prices over time, fell by 0.5% in July.
The Deets
The biggest driver for this decline came from energy, whose 9% drop accounted for 80% of the total decline in goods prices.
The drop in the PPI follows a slowdown in the CPI index for July 2022. Both indicators showed signs that inflation is cooling.
What this Shows
The PPI decreasing shows a sign that the prices producers are paying are not increasing at a higher than expected rate, which indicates that consumer price increases may cool down as well.