Share

US wholesale prices increase on jump in energy costs

Washington - Rising US wholesale prices in August reflect the biggest jump in energy costs since January, while underlying inflation remained contained, a Labour Department report showed on Wednesday in Washington.

Highlights of producer prices (August)

• Producer-price index rose 0.2% m/m (est. 0.3% rise) after 0.1% drop the previous month.

• PPI rose 2.4% y/y after 1.9% gain in prior 12-month period.

• Excluding food and energy, core gauge rose 0.1% m/m, up 2% y/y

Key takeaways

About three-fourths of the monthly gain in the headline gauge came from goods, most of which was due to a 9.5% jump in gasoline, along with the biggest rise in jet-fuel costs since 2009. Since the PPI pricing date was August 15, the data shouldn’t have captured the effects of Hurricane Harvey, said Scott Sager, a Bureau of Labor Statistics economist.

The PPI excluding food, energy, and trade services, a measure some economists prefer because it strips out the most volatile components, rose 1.9% from August 2016, the same as the prior month. That indicates broader inflation is taking time to pick up.

Price pressures in the production pipeline are still relatively contained, helping keep the Federal Reserve’s preferred consumer-price measure below its goal and one reason why policy makers plan to raise borrowing costs only gradually. Central bankers will update their interest-rate forecasts next week, indicating whether the chances of a December hike have ebbed.

The history of hurricanes such as Katrina indicates inflation measures could remain elevated for a few months, economists said.

Other details

• Excluding the volatile categories of food, energy and trade services, producer costs rose 0.2% from the previous month following no change.

• Energy prices rose 3.3% from the prior month, most since January; food costs fell 1.3%, biggest drop since February 2015, as wheat plunged 20.6%, most in nine years.

• Goods prices rose 0.5% after falling 0.1% in July.

• Prices for final demand services rose 0.1% from the prior month .

• Costs for health-care services, used to calculate the Commerce Department’s consumer-spending inflation index or the Fed’s preferred price measure, rose 0.3% from the prior month before adjusting for seasonal variations.

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter:

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.2%
Platinum
910.50
+1.5%
Palladium
1,011.50
+1.0%
Gold
2,221.35
+1.2%
Silver
24.87
+0.9%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders