The Bureau of Labor Statistics said that producer prices for final demand goods and services rose by 0.2 percent in August, bouncing back from a decline of 0.1 percent in July. For manufacturers, producer prices for final demand goods were also up by 0.2 percent after being flat in the prior release. The gain in August stemmed largely from an acceleration in energy prices, up 3.3 percent, the first monthly increases since April. Those rises were enough to offset a 1.3 percent decrease in food prices for the month. On a year-over-year basis, final demand food and energy costs have risen 1.8 percent and 8.6 percent, respectively. Excluding food and energy, producer prices for final demand goods were also up by 0.2 percent.
Overall, producer prices for final demand goods and services have increased 2.4 percent since August 2016, up from 2.0 percent year-over-year in July. Raw material costs have accelerated over the course of the past 12 months, as the year-over-year rate was zero percent one year ago. Nonetheless, core producer prices – which exclude food, energy and trade services – appear to have stabilized of late hovering between 1.9 percent and 2.1 percent year-over-year since April. In this data, core inflation was 2.0 percent year-over-year in August, up slightly from 1.9 percent in July. For comparison purposes, core producer prices were 1.1 percent year-over-year in August 2016.