Wholesale inflation bucked a 12-month cooling trend in July, the Bureau of Labor Statistics reported Friday.

The Producer Price Index, which tracks the average change in prices that businesses pay to suppliers, rose 0.8% annually. That's above June's modest increase of 0.2% and higher than expectations for a 0.7% increase, according to consensus estimates on Refinitiv.

On a monthly basis, producer prices increased 0.3%.

PPI is a closely watched inflation gauge since it captures average price shifts before they reach consumers and is a proxy for potential price changes in stores.

When stripping out the more volatile categories of food and energy, core PPI rose 2.4% annually in July. That compares to 2.4% in June and is hotter than economists' expectations for a 2.3% increase.

On a month-to-month basis, core PPI increased 0.3%.

This story is developing and will be updated.