U.S. wholesale prices were flat in July as energy costs prices eased and food costs remained stable, which adds concerns for the U.S. Federal Reserve that inflation is running too low. Analysts polled by Thomson Reuters had expected the headline PPI to rise by 0.3 percent.

The core producer-price index, excluding food and energy, increased 0.1 percent, the U.S. Department of Labor said on Wednesday. That is below analysts expectation of a 0.2 percent gain. Wholesale energy prices declined 0.2 percent in July because of cheaper residential natural gas. In addition wholesale pharmaceutical prices rose 1 percent.

Over the past 12 months wholesale prices have increased at an unadjusted 2.1 percent while core producer prices have gained 1.2 percent. The Federal Reserve has an inflation target of 2 percent.