The Federal Reserve’s rate-setters were handed a complicated data point this week. US producer prices climbed in August, but the core reading came in softer than expected, giving officials something to chew on before they gather for their September 15-16 policy meeting.
The Producer Price Index for final demand rose 0.4% month-over-month and 5.4% year-over-year in August, according to Bureau of Labor Statistics data released September 10. The core number tells a different story.
What the numbers actually say
Strip out food and energy, and producer prices rose just 0.2% on the month, against analyst expectations of 0.3%. On an annual basis, core PPI came in at 4.6%.
The headline strength was almost entirely an energy story. Goods prices jumped 1.1% on the month, driven by a 24.1% surge in diesel fuel costs. Services prices crept up just 0.1%.
