US producer prices rose in August as energy costs shot up
WASHINGTON — Higher energy costs led to prices at the wholesale level rising in August at the fastest pace in four months.
The Labor Department said Wednesday that its producer price index, which measures inflation pressures before they reach the consumer, rose 0.2 per cent last month. It was the largest monthly increase since a 0.5 per cent gain in April. Inflationary pressures have largely been subdued in recent months. Much of the increase in August came from a 3.3 per cent surge in energy costs. Food expenses slipped in August, including a sharp 20.6 per cent decline in wheat prices.
The survey was taken before Harvey and Irma struck the southern part of the United States, events that will likely cause prices to further rise in the coming months as the rebuilding process begins. Ian Shepherdson, chief economist at Pantheon Macroeconomics, said he is “braced” for a temporary “spike” in producer prices because of the hurricanes.
Core inflation, which excludes volatile food and energy costs, rose 0.1 per cent last month. Over the past 12 months, wholesale prices are up a moderate 2.4 per cent while core prices have risen 2.0 per cent.