Here's what new data from the producer price index says about where inflation is headed, according to economists.

The cost of wholesale goods and services — where rising inflation tends to show up first — posted the biggest increase in July in three years, possibly heralding a sizable acceleration in price increases tied to higher U.

The producer price index (PPI) for final demand rose 0.9% month-over-month after a flat reading in June. Core PPI, which excludes food and energy prices, rose 0.9% month-over-month after a flat reading in June. In July, the PPI for finished goods rose 0.5% month-over-month, up from 0.4% in June.