The BLS released the PPI for August and it came in hotter than expected.
The Producer Price Index for final demand increased 0.7 percent in August, seasonally adjusted, after rising 0.4 percent in July, the U.S. Bureau of Labor Statistics reported today.
The August advance is the largest increase in final demand prices since moving up 0.9 percent in June 2022. On an unadjusted basis, the index for final demand rose 1.6 percent for the 12 months ended in August. In August, 80 percent of the rise in final demand prices is attributable to a 2.0-percent jump in the index for final demand goods. Prices for final demand services advanced 0.2 percent.
The index for final demand less foods, energy, and trade services increased 0.3 percent in August, the same as in July. For the 12 months ended in August, prices for final demand less foods, energy, and trade services rose 3.0 percent, the largest advance since moving up 3.4 percent for the 12 months ended in April.
Final Demand Final demand goods: The index for final demand goods jumped 2.0 percent in August, the largest advance since increasing 2.1 percent in June 2022. The August rise is mostly attributable to prices for final demand energy, which surged 10.5 percent. The index for final demand goods less foods and energy edged up 0.1 percent. In contrast, prices for final demand foods declined 0.5 percent.
Anyone banking on inflation moderating and a Fed cut is officially out of luck. The next Fed meeting is next Wednesday so it will be interesting to see the reaction. In the meantime, stay tuned, stay profitable and stay solvent…