US Wholesale Prices Rise 0.4% in August — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- U.S. Producer Price Index rose 0.4% in August after an upwardly revised 0.1% gain in July, driven by a 4.2% surge in energy prices amid renewed U.S.-Iran hostilities.
- Wholesale energy prices increased 4.2% in August after two consecutive monthly declines, while food prices edged up 0.1% following a 0.9% drop in July.
- Core producer goods prices, excluding food and energy, rose 0.4% in August, and final demand services prices increased 0.1%, with some components showing strong gains.
- Federal Reserve officials are weighing a rate hike at the September 15–16 meeting, as inflation remains above target and labor market strength returns, with markets pricing in a 62% chance of a 25-basis-point increase.
- Methodology changes to how portfolio management, legal services, and software prices are calculated will affect PCE inflation estimates, reducing confidence in translating PPI data into PCE figures for August.
- Morgan Stanley economists estimate core PCE inflation for earlier months could be revised down to 3.1% (12-month) and 3.2% (six-month) from 3.3% and 3.5%, though recent trends should remain stable.
Why it matters: With inflation pressures reaccelerating and new methodology clouding near-term PCE clarity, the Fed faces heightened pressure to act—delay risks undermining credibility, especially after Warsh's hawkish Jackson Hole signal and rising Treasury yields.
Ask SkimNews
