Latest readings on inflation could keep Fed from raising interest rates

The cost of wholesale goods were flat in July thanks to lower gas prices, but not enough to ease inflation worries.

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Wholesale prices were flat in July and inflation pressures in the guts of the economy also eased, adding to recent evidence of a slowdown in the rising cost of living.

The producer-price index was unchanged in June, the government said Thursday. Wholesale prices had fallen in July.

Lower gas prices largely explain the tame readings on wholesale prices in the past two months.

Both consumer and wholesale price increases have slowed enough in the past few months to raise doubts about whether the Federal Reserve will raise interest rates in September.

The latest snapshot of consumer prices, for instance, pointed to a small deceleration in inflation in July for the second month in a row.

The cost of wholesale goods and services rose 4.7% in the 12 months ended in July, down from 5.5% in prior month.

Wholesale prices are where inflation shows up first, and these prices tend to hint at future changes in what consumers pay.

Key details: A separate price gauge known as the core rate, which strips out energy, rose at a faster 0.4% clip in July. The increase was a tick higher than the Wall Street forecast.

The 12-month increase in the core rate slipped to 4.7% from 5%.

Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX were set to rise slightly in Thursday trades.

-Jeffry Bartash