US producer prices barely edged up in July as lower prices for new cars, trucks and many food items kept inflation muted at the wholesale level.
The US Labor Department's producer price index - a gauge of prices received by farms, factories and refineries - rose 0.1 per cent following a 0.5 per cent jump in June.
So-called core producer prices, which exclude volatile food and energy items, declined 0.3 per cent last month after a 0.2 per cent June gain.
The figures came in well below Wall Street analysts' forecasts for a 0.4 per cent climb in wholesale prices and for a 0.2 per cent gain excluding food and energy items.
Bond prices jumped and stock futures climbed immediately after the data were published on optimism that the Federal Reserve will be able to keep interest rates on hold. US central bank policy makers last week kept rates steady after hiking them steadily for more than two years.
The July fall in core prices was the first monthly decline since a matching 0.3 per cent drop last October, although core prices were unchanged in December.
Wholesale energy prices kept rising in July, up 1.3 per cent after a 0.7 per cent June rise.
But the gain in gasoline prices was not as steep as in the previous month, up 0.7 per cent following a steep 6.3 per cent June rise though it was a fifth straight monthly increase.
Generally, wholesale prices are less intensely awaited in financial markets than is the monthly consumer price index, which is scheduled to be published tomorrow morning. Wall Street analysts are forecasting a 0.4 per cent rise in consumer prices for July.