Producer Prices Ease in August

The Producer Price Index (PPI) declined for the second consecutive month

Wholesale inflation fell slightly last month as gas prices tumbled.

The Labor Department reported its Producer Price Index (PPI) declined 0.1% in August from the month before, matching economists' estimates. The annual increase was 8.7%, below forecasts and down from July’s gain of 9.8%.

Excluding costs for food, energy, and trade services, prices rose 0.2% for the month and 5.6% year-over-year, down from 5.8% in July.

Final demand costs for goods declined 1.2% in August, with three-quarters of the decline attributable to the drop in gasoline prices, which sank 12.7%. Food costs were largely unchanged, although egg prices plunged 25% after soaring 44.2% in July. 

Prices for Services Rise

The index of final demand services was up 0.4%, with a gain in margins for trade services accounting for 60% of the increase.

The data helped in easing inflation concerns somewhat after the department's report yesterday showing consumer prices were higher than expected last month, leading to a major selloff in U.S. equities.

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