The ppi report today shows U.S. producer prices for final demand climbed 0.4% in August, the Bureau of Labor Statistics said on Sept. 10.
The BLS news release reported that prices for final demand goods rose 1.1% and services increased 0.1% for the month, lifting the 12‑month PPI to a 5.4% gain, according to the agency’s published tables.
Reuters coverage noted that higher energy costs, airline fares and hospital services were among the drivers of the August increase and quoted economists who said the reading bolstered expectations of a September rate move by the Federal Reserve.
The Reuters story reported that the CME FedWatch tool raised the implied probability of a 25‑basis‑point hike at the Fed’s Sept. meeting to about 70% from roughly 62% before the PPI report.
Components on the BLS table included a 24.1% monthly jump in No. 2 diesel fuel and a 4.2% rise in energy overall; the agency’s tables also showed airline passenger services up 4.2% and inpatient care rising 0.4%.
Markets reacted: Reuters reported U.S. Treasury yields rose and stocks traded lower after the release, while analysts said the PPI added weight to the case for tightening even as some Fed watchers cited upcoming methodology changes to PCE inflation measures.
The ppi report today follows recent strong labor data that economists say, when combined with elevated wholesale inflation, increases pressure on the Fed to consider further hikes; Reuters quoted Carl Weinberg of High Frequency Economics and Jeffrey Roach of LPL Financial on that point.
Read the BLS news release for the detailed tables and component breakdowns, and see market coverage for how traders updated rate odds after the print.
Sources
- Bureau of Labor Statistics — PPI news release and component tables showing a 0.4% monthly rise, goods +1.1%, services +0.1%, 12‑month PPI +5.4%.
- Reuters — reporting on the Aug. 10 PPI release, components driving the increase, and the CME FedWatch move to about 70% for a September 25‑bp hike.
