Rising energy costs drive up US producer pricesBusiness | 13 Sep 2017 8:59 pm
Higher energy costs led to prices at the wholesale level rising in August at the fastest pace in four months.
The Labor Department said today that its producer price index, which measures inflation pressures before they reach the consumer, inched up by 0.2 percent last month. It was the largest monthly increase since a 0.5 percent gain in April. Inflationary pressures have largely been subdued in recent months. Much of the increase in August came from a 3.3 percent surge in energy costs. Food expenses slipped in August, including a sharp 20.6 percent decline in wheat prices.
Core inflation, which excludes volatile food and energy costs, also rose 0.1 percent last month. Over the past 12 months, wholesale prices are up a moderate 2.4 percent while core prices have risen 2 percent.
Despite the monthly increase, relatively low inflation has been a constant throughout the recovery from the Great Recession will continue. For the past five years, inflation has stayed below the Federal Reserve's target of annual price gains of 2 percent. The Fed's preferred measure of core inflation for consumers has risen just 1.4 percent over the past 12 months.
For producers, food expenses slipped in August. This included a sharp 20.6 percent decline in wheat prices, the biggest decline since April 2008. Producer costs for plastics, investment advice and airline passengers also fell in August.
Prices for iron and steel scrap rose in August as did the costs for industrial chemicals. -AP