WASHINGTON, Sept 16 (Reuters) – U.S. producer prices rose
slightly more than expected in August as energy prices recorded
their first increase since March, government data showed on
Thursday, calming fears of deflation for now.
The Labor Department said the seasonally adjusted index for
prices paid at the farm and factory gate increased 0.4 percent,
the largest increase in five months, after gaining 0.2 percent
in July.
Analysts polled by Reuters had expected producer prices to
rise 0.3 percent last month. In the 12 months to August,
producer prices increased 3.1 percent, slowing from the prior
month’s 4.2 percent increase.
Producer prices last month were bumped up by a 2.2 percent
jump in energy costs. Gasoline prices surged 7.5 percent, the
largest increase since January, after falling 2.2 percent in
July. Food prices fell 0.3 percent after rising 0.7 percent in
July.
Stripping out volatile food and energy costs, core producer
prices edged up 0.1 percent last month, matching market
expectations. Core PPI increased 0.3 percent in July.
Inflation remains muted amid lackluster domestic demand,
which is constraining producers’ ability to pass on increases
to consumers. The Federal Reserve is expected to renew its
pledge to keep monetary policy accommodative to support the
economic recovery at a regular meeting next Tuesday.
Last month, core PPI was held back by a 0.4 percent
decline in passenger car prices, which offset a 0.2 percent
increase in the cost of light motor trucks, the Labor
Department data showed.
In the 12 months to August, the core producer price
index rose 1.3 percent after increasing 1.5 percent in July.
The year-on-year increase was in line with market expectations.
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