Producer prices for final demand accelerated in August, with the Producer Price Index rising 0.4% on a seasonally adjusted basis. This follows a 0.1% increase in July and a 0.1% decline in June, pointing to a firmer pace of wholesale price growth as the summer progressed. On an unadjusted basis, final demand prices were 5.4% higher over the 12 months ended in August, underscoring a notable year-over-year gain in producer-level inflation.
Goods prices were the primary driver of August’s overall increase. The index for final demand goods advanced 1.1% during the month after declining in each of the prior two months. Energy was the standout component, with energy costs climbing 4.2% and accounting for more than three-fourths of the total rise in final demand goods prices. Within that category, diesel fuel posted a particularly sharp move higher, with prices jumping 24.1% and contributing more than one-third of the monthly increase in goods prices.
Stripping out the direct impact of food and energy still left a measurable uptick in goods prices. The index for final demand goods less foods and energy increased 0.4% in August, indicating broader cost pressures beyond the energy complex. Wholesale food prices showed only a modest change by comparison, edging up 0.1% for the month.
Service categories recorded a smaller gain. Prices for final demand services rose 0.1% in August, reflecting a comparatively mild monthly increase relative to the goods side of the index. On a 12-month basis, the index registered a 4.6% advance, slightly above the 4.3% year-over-year increase reported the prior month, signaling some firming in service-related price pressures over the year.
Core producer inflation, which excludes some of the more volatile components, continued to show moderate growth. The index for final demand less foods, energy, and trade services rose 0.3% in August, easing slightly from July’s 0.4% gain. Over the past 12 months, this core measure of wholesale prices advanced 4.7%, indicating that underlying producer inflation remains solid even as the pace has moderated somewhat on a month-to-month basis.
