for final demand rose 0.3% in July, according to the Labor Department. This compared with economist expectations for 0.2%. And in the 12 months through July, the PPI rose 0.8% against estimates for a 0.7% advance. However, data for June was revised lower to show the PPI unchanged instead of nudging up by the previously reported 0.1%., giving up most early gains on milder-than-feared consumer price inflation data.
"We think there's some reassessment of inflation going on with investors looking further under the hood. Disinflation has been very rapid in the past months at the top level but that may be levelling out here a little," said Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute in St Louis.
Friday's data suggests the Fed will need to keep rates higher for longer and "it puts additional rate hikes back on the table for this year," said Christopher who noted that while some people were taking profits in response, others with cash on the table were stepping in to buy the dip.