WASHINGTON — Inflation at the wholesale level jumped 8.7% in August from the year earlier, a slowdown from July but still a painfully advanced that suggests prices could keep spiking for months ahead.
Wednesday’s report from the Labor Department also showed that on a month-to-month basis, the producer price index which measures inflation before it reaches consumers declined 0.1% from July to August, the next straight monthly decline.
The better readings mostly reflect plunging gas prices and do not necessarily indicate a broader slowdown in inflation. A measure that excludes the volatile food and energy categories so-called core prices rose 0.4% from July to August and 7.3% in August weighed against this past year.
The expense of services which are increasingly driving consumer inflation rose 0.4% in August, driven by higher charges for public transportation, car rentals plus some financial services.
Still, there have been several encouraging signs in Wednesday’s report: Wholesale food costs were flat from July to August, following a 1.3% spike the prior month. And wholesale goods prices overall fell 1.2%, suggesting that goods charges for consumers could soon decline.
On Tuesday, the federal government reported that consumer inflation was rampant across a lot of the economy in August. Aside from cheaper gas, consumer charges for from food and rents to furniture, health care and new cars got pricier last month. The worse-than-expected consumer price spikes sent the currency markets tumbling to its worst day in a lot more than 2 yrs on fears that the Federal Reserve will turn a lot more aggressive in raising interest levels to fight inflation.
Wednesday’s producer price data captures inflation at a youthful stage of production and may often signal where consumer prices are headed. In addition, it feeds in to the Feds preferred way of measuring inflation, to create the non-public consumption expenditures price index.