[News] U.S. PPI Slightly Increases in August as Services Prices Rebound

The U.S. Producer Price Index (PPI) slightly increased in August, according to data released by the Bureau of Labor Statistics on September 12. The PPI rose by 0.2% month-over-month (previously 0%), exceeding market expectations of 0.1%. On a year-over-year basis, the PPI increased by 1.7% (previously 2.2%), falling short of the expected 1.8%, marking the lowest annual gain so far this year.

Breaking down the details, final demand goods prices remained flat month-over-month (previously up 0.6%), primarily due to a decline in energy prices, which dropped by 0.9% (previously up 1.8%). Excluding food and energy, prices rose by 0.2% for the month, posting the same increase as in the prior month.

Final demand services prices rose by 0.4% (previously down 0.3%), mainly driven by increases in other service categories, with guestroom rental prices contributing the most, surging by 4.8%. This mirrors the trend seen in the Consumer Price Index (CPI) data released a day earlier.

Overall, while the PPI demonstrated moderate growth in August, the Fed has shifted its focus on inflation towards the labor market. As a result, the inflation influence on future rate cuts has diminished. The market continues to anticipate a total of four 25-basis-point rate cuts throughout 2024, with expectations unchanged.

Read more at Datatrack