Here come producer prices

The Labor Department reports on U.S. producer price inflation in July at 8:30 a.m. Eastern Friday. Economists had expected the index to inch up by just 0.1%.

PPI measures inflation at the manufacturer level, which can be a leading indicator of higher ultimate prices for the consumer.

Wholesale prices excluding these two components rose 0.3 percent for a second month, compared with the 0.1 percent gain seen by the median forecast of economists surveyed.

The Labor Department said its producer price index edged up by 0.2% in July after climbing by 0.4% in June. Federal Reserve officials have previously said such slumps are transitory as they look for signs that inflation will move toward their 2 percent target in order to raise interest rates.

S&P 500 futures were weaker by 0.25 percent in front of the PPI release.

Prices charged by producers rose more slowly in July, reflecting declines in both food and energy.

Many private economists have pegged the Fed’s next meeting in September as the time when the central bank will start raising rates. Food prices increased 0.6 percent in June.

Food costs fell 0.1 per cent in July. Wholesale chicken egg prices fell 24.2 per cent in July after soaring a record 84.5 per cent in June.

Gasoline prices rose 1.5 percent but the cost of natural gas, home heating oil and jet fuel all declined. About 40 percent of that gain was traced to a 9.9 percent surge in hotel-room rates, the biggest in data going back to 2009.