U.S. producer prices for final demand increased 0.4% month on month in August, matching estimates and accelerating from a 0.1% increase in July, according to data from the Labor Department’s Bureau of Labor Statistics.
On an annual basis, the producer price index rose 5.4%, compared with 4.8% in July and an expected increase of 5.3%.
Goods prices increased 1.1% during August, while services prices rose 0.1%.
More than a third of the increase in goods prices was attributed to diesel fuel, which rose 24.1%. Prices for gasoline, jet fuel and home heating oil also increased.
Services prices advanced for a third consecutive month, with the increase largely reflecting higher prices for final demand transportation and warehousing services.
Core Producer Price Measure Rises 0.3%
Excluding food, energy and trade services, producer prices increased 0.3% in August, compared with 0.4% in July. The measure was up 4.7% from a year earlier.
Airline passenger fares increased 0.8%, while portfolio management fees declined 1.8%. Both are among the components used in calculating the personal consumption expenditures price index, an inflation measure monitored by the Federal Reserve.
The producer price report comes ahead of Friday’s consumer price inflation data and the Federal Reserve’s interest-rate decision next week. Markets were pricing in approximately a 64% probability of a rate increase at Wednesday’s meeting, according to the supplied information.
Energy costs have also increased amid the continuing conflict in the Middle East, which is now in its seventh month.