Producer prices in the U.S. increased by slightly more than expected in the month of August, according to a report released by the Labor Department on Thursday.
The Labor Department said its producer price index for final demand rose by 0.3 percent in August after climbing by 0.6 percent in July. Economists had expected prices to edge up by 0.2 percent.
The slightly stronger than expected price growth came despite a modest pullback in energy prices, which edged down by 0.1 percent in August after spiking by 5.3 percent in July.
The report showed food prices also fell by 0.4 percent in August after declining by 0.5 percent in the previous month.
Excluding food and energy prices, core producer prices climbed by 0.4 percent in August following a 0.5 percent advance in July. Core prices were also expected to tick up by 0.2 percent.
The bigger than expected increase in core prices came as prices for final demand services rose by 0.5 percent for the second straight month.
Prices for trade services led the way higher, jumping by 1.2 percent in August after climbing by 0.8 percent in July.
The report showed more modest increases in prices for transportation and warehousing and other services, which rose by 0.2 percent and 0.3 percent, respectively.
“The moderate advance in August producer prices confirms that underlying price dynamics continue to gradually normalize,” said Lydia Boussour, Senior U.S. Economist at Oxford Economics.
She added, “While some see high inflation lurking around the corner, we believe there is little scope for prices to heat up meaningfully as the economy continues to only slowly recover from the Covid-19 crisis.”
Compared to the same month a year ago, producer prices in August were down by 0.2 percent following a 0.4 percent drop in July. Core prices were up 0.6 percent year-over-year.
On Friday, the Labor Department is scheduled to release a separate report on consumer prices in the month of August.
Economists expect consumer prices to rise by 0.3 percent in August following a 0.6 percent increase in July. Core prices are expected to inch up by 0.2 percent after climbing by 0.6 percent.
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