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U.S. producer prices continue rising in July

Xinhua, August 14, 2015 Adjust font size:

U.S. producer prices rose for the third straight month in July, a sign that inflation is slowly building up.

The Producer Price Index (PPI), a gauge of inflation at the factory gate, rose 0.2 percent in July, following a 0.4 percent increase in June, the Labor Department said Friday. On a year-on-year basis, the PPI declined 0.8 percent, the sixth straight 12-month decrease.

The increase in the PPI can be traced to prices for final demand services, which rose 0.4 percent, the Labor Department said. The index for final demand goods wedged down 0.1 percent.

Excluding the volatile food and energy sectors, the so-called "core" PPI went up 0.3 percent in July, the same as in June.

The U.S. Federal Reserve is looking for inflation to firm gradually as it considers when to raise benchmark interest rates.

Fed officials expected that as the effects of transitory factors, such as low oil prices and strong dollars, dissipate and as the labor market improves further, inflation will move gradually back towards the central bank's 2 percent objective.

The Fed's preferred inflation gauge, the price index for personal consumption expenditures, has been below the central bank's 2 percent objective for years. Endi