U.S. Producer Prices Fall in August, Underscoring Cooling Inflation Ahead of CPI 

The Producer Price Index (PPI) slipped 0.1% in August, missing forecasts for a 0.3% gain and reversing July’s +0.9% increase, the Bureau of Labor Statistics said Wednesday. On a year-over-year basis, producer prices rose 2.6%, down from a revised 3.1% in July and below the 3.3% consensus. 

Excluding volatile food and energy costs, core PPI also declined 0.1%, compared with expectations for a 0.3% increase and following July’s 0.7% gain, revised down from 0.9%. The annual core measure eased to 2.8%, well below forecasts of 3.5% and the prior month’s 3.4%, revised from 3.7%. 

The weaker-than-expected wholesale inflation data arrives just before Thursday’s Consumer Price Index (CPI) release, the final major inflation gauge before the Federal Reserve’s policy meeting next week. While a rate cut is widely anticipated, the CPI report will be critical in shaping expectations for the magnitude and timing of Fed easing through year-end.