August wholesale inflation rises 0.7%, hotter than expected, but core prices in check

Inflation at the wholesale level rose more than expected in August, countering recent data showing that price increases have tempered lately.

The producer price index, a measure of what producers get for their goods and services, increased a seasonally adjusted 0.7% in August and 1.6% on a year-over-year basis, the U.S. Department of Labor reported. That monthly gain was above the Dow Jones estimate for a 0.4% rise and was the biggest single-month increase since June 2022.

However, excluding food and energy, the PPI climbed 0.2%, in line with the estimate. On a 12-month basis, core PPI increased 2.1%, its lowest annual level since January 2021. Excluding food, energy and trade services, the PPI increased 0.3%.

The data comes a day after the more closely followed consumer price index showed a rise of 0.6% on a monthly basis and 3.7% from a year ago. Excluding food and energy, core CPI increased 0.3% and 4.3% respectively.

As with the CPI, the upward pressure on the PPI came largely from a big jump in energy prices. The PPI energy index rose 10.5% on the month, spurred by a 20% surge in gasoline.

Final demand goods prices rose 2% in August, the biggest one-month gain since June 2022. Services prices increased 0.2%.

In other economic news Thursday, the Commerce Department estimated that retail sales increased a higher-than-expected 0.6% in August, well above the Dow Jones estimate for a 0.1% rise. Excluding autos, sales also increased 0.6% against the 0.4% estimate.

Those numbers are not adjusted for inflation, indicating that consumers continue to hold up despite rising prices and increasing levels of credit card debt. Compared to the monthly rise in CPI, retail sales in real terms were flat on the month. Sales were up 2.5%…