The Producer Price Index (PPI), which measures inflation on the wholesale level, increased by 0.3% in July, coming in just above expectations. On an annual basis, PPI rose from 0.2% to 0.8%. Core PPI, which also strips out volatile food and energy prices, rose by 0.3%, with the year-over-year reading remaining at 2.4%.

What’s the bottom line? While annual PPI also moved higher in the wrong direction, it was coming from a very low level and remains extremely muted, well below last year’s 11.7% peak.

There has been mixed chatter from the Fed regarding whether they will hike rates again at their meeting on September 20. Remember, the Fed started hiking their benchmark Fed Funds Rate (which is the overnight borrowing rate for banks) last year to slow the economy and help curb runaway inflation. The Fed will be closely watching upcoming CPI and PPI readings for August (releasing September 13 and 14) and their favored inflation report Personal Consumption Expenditures (July’s data releases August 31) as they weigh this decision.