Producer prices in the U.S. increased by slightly more than expected in the month of August, according to a report released by the Labor Department on Friday.
The Labor Department said its producer price index for final demand climbed by 0.7 percent in August after jumping by 1.0 percent for two straight months. Economists had expected producer prices to increase by 0.6 percent.
The bigger than expected increase in producer prices was partly due to a rebound in food prices, which spiked by 2.9 percent in August after tumbling by 2.1 percent in July.
Prices for trade services also showed a notable increase, jumping by 1.5 percent in August after surging up by 1.7 percent in July.
Excluding prices for food, energy and trade services, core producer prices rose by 0.3 percent in August following a 0.9 percent advance in July. Core prices were expected to rise by 0.4 percent.
The report showed a continue spike in prices for transportation and warehousing services, which soared by 2.8 percent in August after shooting up by 2.7 percent in July.
With another monthly increase, the annual rate of growth in producer prices accelerated to 8.3 percent in August from 7.8 percent in July, reflecting the largest advance since 12-month data were first calculated in November 2010.
The annual rate of growth in core producer prices also ticked up to 6.3 percent in August from 6.1 percent in July, showing the largest year-over-year increase since data were first calculated in August 2014.
“While last month’s increase in producer prices was slower than the prior two months, the latest gain drove headline and core PPI inflation to fresh record highs,” Mahir Rasheed, U.S. Economist at Oxford Economics.
“However, price pressures continue to be driven by virus-sensitive sectors that will improve as supply and demand patterns normalize further,” he added. “Still, the ongoing supply disruptions will keep producer prices sticky.”
Next Tuesday, the Labor Department is scheduled to release a separate report on consumer price inflation in the month of August.
Source: Read Full Article