The Labor Department said on Friday its producer price index dropped 0.4 percent last month, the first decline since March and the largest monthly drop since September 2015. That followed an increase of 0.5 percent in June.
The biggest driver was energy. Last month, energy prices fell 1.0 percent after jumping 4.1 percent in June. Prices for services fell 0.3 percent, with apparel, jewelry, footwear and accessories retailing accounting for nearly 60 percent of the drop.
The Commerce Department also reported that U.S. retail sales were virtually unchanged in July, down from a gain of 0.8 percent in June, Auto sales rose 1.1 percent in July, their strongest growth since April. But excluding autos, retail-sales growth slumped 0.3 percent last month—the weakest reading since January.