The U.S. Producer Price Index for Finished Goods, a measure of wholesale inflation, declined 0.2% in July, on a seasonally adjusted basis, the U.S. Department of Labor reported Thursday. Economists had expected it to rise 0.1%.

The dip follows a 0.1% rise in June and a 0.4% decline in May. Excluding food and energy, wholesale prices fell 0.3%.

“Lower vehicle prices were responsible for this, reflecting the carmakers’ giveaway incentive programs,” says BMO Nesbitt Burns. “Computer prices were off particularly sharply on top of an already-hefty decline in the prior month. We would not stress a special factors analysis for the decline, however. There were numerous negative readings among the components.”

BMO says that there is a whiff of deflation in the picture at the finished goods stage. “We are not too concerned because earlier stages of the pipeline are showing firmness.”

RBC economists says that the report shows that businesses still face next to no pricing power in the U.S. economy. CIBC World Markets agrees that the negative finished goods index suggests that final product manufacturers are still absorbing price hikes for commodities like steel and cotton.

“Today’s numbers reinforce the perception that inflation remains contained, ensuring that there is room for the Fed to ease if it desires, although we continue to look for a shift to an easing bias, rather than an actual rate cut at next week’s meeting,” concludes CIBC.

“This report continues to support either policy stability or a bias towards easing by the U.S. Federal Reserve,” RBC says.

The Fed’s next policy meeting is August 13.