Producer Prices Rose by 0.2 Percent in August

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.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM) and the Director of the Center for Manufacturing Research for The Manufacturing Institute, where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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