US producer prices rise most in more than a year on energy costs

Prices paid to US producers increased in August by the most in more than a year, boosted by rising energy and transportation costs.

The producer price index for final demand increased by 0.7% from a month earlier, according to the Bureau of Labour Statistics. The cost of gasoline surged 20%, accounting for much of the gain. Excluding food and energy, the PPI rose 0.2%.

While normalising supply chains and a slowdown in many economies abroad have generally helped alleviate inflationary pressures at the wholesale level, rising oil prices threaten to unravel some of that progress. On an annual basis, the PPI accelerated for a second month following a year-long downward trend.

Other energy categories that increased last month included jet fuel, diesel and heating oil. Within services, residential real estate, truck transportation of freight and wholesaling of machinery and equipment also rose.

The prices of goods jumped 2%, though excluding energy and food they were up 0.1%. Services costs rose 0.2% after a 0.5% gain the prior month.

© 2023 Bloomberg