Producer Prices Rise 0.4% as Energy Costs Surge

The Producer Price Index for final demand increased 0.4% on a seasonally adjusted basis in August, following a 0.1% uptick in July and a 0.1% decline in June. Over the 12 months ended in August, unadjusted final demand prices advanced 5.4%.

Rising goods prices powered the bulk of the monthly increase, advancing 1.1% in August after two straight months of declines. Energy costs led the climb, soaring 4.2% and accounting for more than three-fourths of the overall rise in final demand goods. A 24.1% jump in diesel fuel prices alone drove more than a third of the monthly increase for goods.

Excluding energy, the index for final demand goods less foods and energy rose 0.4%, while wholesale food prices edged up 0.1%. Meanwhile, prices for final demand services increased 0.1% during the month. On a yearly basis, the index increased 4.6% versus 4.3% the prior month.

Core producer inflation showed steady moderate growth. The index for final demand less foods, energy, and trade services moved up 0.3% in August, slightly cooling from July’s 0.4% gain. Over the past 12 months, this core wholesale measure has advanced 4.7%.