Compared to June, wholesale inflation rose by 0.1%, below market consensus expectations.

U.S. industrial production prices rose 2.2% in July, slowing from a 2.7% increase in the previous month, the Labor Department reported Tuesday.

Compared to June, wholesale inflation rose by 0.1%, below market consensus expectations of a 0.2% rise, in line with the increase in the previous month.

Excluding the impact of food and energy, the underlying figure was unchanged in July from the previous month, while the annual reading rose 2.4%.

"The data fit into the 'more encouraging' category of price data that Fed officials have been looking for," said Matthew Martin, U.S. economist at Oxford Economics.

In this regard, as central bank officials are more attentive to the downside risks to the labor market from a restrictive monetary policy, "the report will be viewed favorably by Federal Reserve officials and supports the argument for a rate cut in September."