WASHINGTON: U.S. producer prices rose a bit more than expected in August as the cost of services increased solidly, while underlying producer inflation continued to firm.
The producer price index for final demand rose 0.3per cent last month after surging 0.6per cent in July, the Labor Department said on Thursday. In the 12 months through August, the PPI fell 0.2per cent after dropping 0.4per cent in the 12 months through July.
Economists polled by Reuters had forecast the PPI would gain 0.2per cent in August and fall 0.3per cent on a year-on-year basis.
Producer prices were led by a 0.5per cent increase in services. Nearly 20per cent of the rise in services was attributed to
a 1.1per cent increase in margins for machinery, equipment, parts, and supplies wholesaling. Prices for goods edged up 0.1per cent.
Excluding the volatile food, energy and trade services components, producer prices rose 0.3per cent in August, advancing by the same margin for three straight months. In the 12 months through August, the core PPI gained 0.3per cent. The core PPI edged up 0.1per cent on a year-on-year basis in July.
The Federal Reserve tracks the core personal consumption expenditures (PCE) price index for its 2per cent inflation target, a flexible average. The core PCE price index climbed 1.3per cent in July after increasing 1.1per cent in June. August data is scheduled to be released at the end of the month.
(Reporting By Lucia Mutikani; Editing by Chizu Nomiyama)