The Producer Price Index (PPI) jumped 4.7 percent from a year ago, down from a 5.5 percent increase in June, said the Department of Labor.
PPI was flat on a month-on-month basis.
The slowdown came on the back of a fall in energy prices, which dipped 3.1 percent from the previous month.
This was a smaller decline than seen in June, but nonetheless suggests that the energy shock due to the war on Iran was easing somewhat.
A longer term resolution remains elusive, however, adding to concerns that inflation could persist.
Global energy costs have surged since US-Israel strikes targeting Iran from late February prompted Tehran to virtually block off access to the Strait of Hormuz.
The waterway is key to international energy transit. Prices at US gasoline pumps have climbed since, adding pressure to businesses’ transportation costs.
In July, more than half of the drop in goods costs was linked to lower gasoline prices, the Labor Department said.
“The indexes for fresh and dry vegetables, diesel fuel, jet fuel, residual fuels, and thermoplastic resins and materials also fell,” the report added.
