Prices at the wholesale level dipped in July, fueling speculation the Federal Reserve could cut interest rates again to help prop up the slow-moving economy.

On Thursday the U.S. Labor Department reported the Producer Price Index fell 0.2% in July, following a 0.1% increase in June. Excluding the volatile food and energy sectors, the PPI core rate fell 0.3% in July after rising 0.2% in June, the biggest drop since October.
Renewed discounting of car and light truck prices, off 1.5% from June, was
the major month-to-month change, said Newport Communications Senior Economist Jim Haughey.
“This is also a caution sign,” he said. “Detroit brings back the discounts only when sales are weak. Also steel prices jumped a further 0.9%, pushing heavy truck prices up by the same amount.”
Haughey said freight rates slipped after a sharp pickup in June, while truckload rates fell 0.1% after rising 0.5%. Less-than-truckload rates dropped 1.2% giving up two-thirds s of June's large gain.
“This probably reflects shipper resistance to prices rises requested by carriers," Haughey says. "It is a tough environment to get a price increase when manufacturers are watching costs closely because their own prices have dropped 0.6% over the last year."
Because there is near-zero inflation and higher bond rates, the real cost of business credit is very high. Haughey advises to watch for the Federal Reserve to make another .25% cut in interest when they meet next week.