Wholesale price increases in the United States eased in July, suggesting that inflation pressures were cooling further as the Federal Reserve moves closer to cutting interest rates, likely beginning next month.

The Labor Department reported on Tuesday that its producer price index — which tracks inflation before it reaches consumers — rose 0.1 percent from June to July and 2.2 percent from a year earlier.

Excluding food and energy prices, which tend to fluctuate from month to month, so-called core wholesale prices were unchanged from June and up 2.4 percent from July 2023.

The increases were milder than forecasters had expected and were nearly consistent with the Fed's two percent inflation target.

The producer price index can provide an early sign of where consumer inflation is headed. Economists also watch it because some of its components, notably healthcare and financial services, flow into the Fed’s preferred inflation gauge — the personal consumption expenditures, or PCE, index.

On Wednesday, the Labor Department will release the most well-known inflation measure, the consumer price index.

Forecasters have estimated that consumer prices rose 0.2 percent from June to July, after actually falling 0.1 percent the previous month, and three percent from July 2023, according to a survey by the data firm FactSet.

Inflation has plummeted since peaking at a four-decade high in mid-2022.

But as Americans prepare to vote in the November presidential election, many remain unhappy with consumer prices, which are nearly 19 percent higher than were before the inflationary surge began in the spring of 2021.

Many have assigned blame to US President Joe Biden, though it's unclear whether they will hold Vice President Kamala Harris responsible as she seeks the presidency. (AP)