Good news! Producer price growth in the US was cooler than expected last month, data out Tuesday showed.

The headline final demand index rose 0.1% in July, the BLS said. Consensus expected a 0.2% advance.

Excluding food and energy, PPI prices were unchanged from the prior month. Unrounded, that index actually posted a decline.

Obviously, the benign read on wholesale prices will be promptly eclipsed by CPI on Wednesday, but you shouldn’t discount PPI entirely: It’s a kind of early hint at PCE prices.

The YoY print for the headline gauge was 2.2%, the coolest since March and below estimates. The ex-food and energy index rose 2.4% from July of last year.

As you can surmise from the flat core reading, the entirety of the gain in July came from the goods side, where the energy and food indexes rose 1.9% and 0.6% MoM, respectively. The gas gauge by itself accounted for a quarter of the overall PPI increase.

The services index, meanwhile, notched a MoM decline. As the figure below shows, that’s a notable development.

PPI services prices haven’t notched a MoM decline since December, and July’s drop was the largest since March of 2023.

Again, this isn’t “top-tier” data per se, but it was good news all the same, particularly to the extent anyone’s inclined to view the soft read on the services side as somehow indicative of slower “underlying” price growth.

Bottom line: The Fed will take it. And so will the market, which was plainly prepared to move on from the drama experienced over the past two weeks. Data permitting, of course.