| Wholesale Inflation |
| Producer prices surged at a hotter-than-expected pace of 0.7 percent in August, the sharpest increase in 14 months, according to the Bureau of Labor Statistics (BLS). This was up from 0.4 percent in July and topped the consensus estimate of 0.4 percent. Prices for goods accelerated by 2 percent, fueled mainly by a nearly 11 percent spike in energy costs. Prices for services inched higher by 0.2 percent, driven by a 1.4 percent boost to higher transportation and warehousing costs. Core wholesale prices, which omit the volatile energy and food components, edged up by a slightly higher-than-expected 0.3 percent on a month-over-month basis, down from 0.4 percent. Core PPI was unchanged at 2.2 percent, the lowest reading since January 2021. Overall, commodities were the driving force behind the increase. Economists paid closer attention to wholesale prices because they're typically a leading index for broader consumer prices. The PPI measures what companies pay for supplies, such as fuel and packaging. These costs are then passed on to shoppers, revealing if inflation is trending higher or lower. |
