US producer prices pick up slightly after downward revisions
This comes as policymakers at the US central bank are projected to start reducing interest rates as cost pressures diminish in recent months
US PRODUCER prices picked up slightly in August after the previous month’s numbers were revised lower, adding to evidence that inflationary pressures are moderating.
The producer price index (PPI) for final demand increased 0.2 per cent from a month earlier following a flat reading in July, indicated a US Bureau of Labor Statistics (BLS) report released on Thursday (Sep 12).
The median forecast in a Bloomberg survey of economists called for a 0.1 per cent gain. Compared with a year ago, the PPI rose 1.7 per cent – the least since early in 2024.
A measure of producer prices excluding volatile food and energy categories climbed 0.3 per cent in August from the prior month, and 2.4 per cent from a year ago.
Stock index futures and US Treasury yields were little changed following the release of the numbers, as investors maintained bets on a quarter-point interest rate cut from the US Federal Reserve at next week’s meeting.
The wholesale inflation data follow the more closely watched consumer price index, which showed underlying inflation accelerated in August on higher shelter costs.
Still, with risks to the economy from cost pressures diminishing in recent months, policymakers at the US central bank are projected to start reducing interest rates next week amid concerns about the durability of the labour market.
The PPI report showed services costs increased 0.4 per cent, with a rise in the cost of guestroom rentals cited as a “major factor” by the BLS. Prices of goods were unchanged last month, restrained by a sharp drop in energy costs.
Stripping out food, energy and trade, a less-volatile measure favoured by many economists, prices rose 0.3 per cent for a second month. Compared with a year ago, the gauge rose 3.3 per cent.
Economists also parse the PPI data for categories that feed into the Fed’s preferred inflation measure – the personal consumption expenditures (PCE) price index. Those were generally tame. The August PCE price gauge is due later this month.
Among those categories, a measure of portfolio-management fees, physician care and hospital inpatient care costs were all unchanged, while airfares fell 0.8 per cent as carriers adjusted to cooler discretionary travel spending.
Costs of processed goods for intermediate demand, which reflect prices earlier in the production pipeline, fell 0.1 per cent. BLOOMBERG
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services
