US Wholesale Inflation Falls Short of Projections

Cornelia Mascio
Settembre 13, 2017

The increase was the largest since January and accounted for 75 percent of the 0.5 percent rise in the prices of goods.

US producer prices rebounded in August, driven by a surge in the cost of gasoline, and there were also signs of a pickup in underlying producer inflation.

Figures released Wednesday morning by the U.S Labor Department showed the stateside producer price index for final demand increased 0.2% last month after slipping 0.1% in July. Economists surveyed by MarketWatch had forecast a 0.3% increase in wholesale inflation after a small decline in July.

The cost of food fell 1.3 percent, the biggest drop since February 2015, after being unchanged in July.

A almost 10% jump in the cost of gas accounted for most of the increase in wholesale inflation last month.

The latest snapshot on wholesale prices, however, indicated that inflation is still muted. And inflation further down the pipeline - as reflected by raw and partly finished goods - have eased off recent multi-year highs. The Federal Reserve is expected to leave its benchmark interest rate untouched when the meet next week, and the likelihood of a third rate hike this year has receded. Most analysts don't think the central bank will increase the cost of borrowing again at least until the end of the year.

Harvey made landfall toward the end of the month on the Texas Gulf Coast, shutting down a large share of United States production and refining capacity, which hit fuel and crude prices.

A bump in fuel prices helped nudge United States wholesale prices higher in August, to their biggest gain in four months, the Labor Department reported on Wednesday (Sep 13). In the 12 months through August, the PPI rose 2.4 percent after advancing 1.9 percent in July. The closely followed core rate strips out the volatile categories of energy, food and trade and is viewed as a more stable barometer of inflationary trends.

Although the fuel price index spiked last month, it was not affected by Hurricane Harvey, since the information used to calculate it was collected before the storm hit.

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