US inflation at the wholesale level jumped 8.7 percent last month from a year earlier, a slowdown from July yet still a painfully high level that suggests prices would keep spiking for months to come.
Wednesday’s report from the US Department of Labor also showed that on a month-to-month basis, the producer price index, which measures inflation before it reaches consumers, slid 0.1 percent from July to last month, the second straight monthly decline.
However, the better readings mostly reflect plunging gas prices and do not necessarily point to a broader slowdown in inflation.
Photo: AFP
Core prices, a measure that excludes the volatile food and energy categories, rose 0.4 percent from a month earlier and 7.3 percent from a year earlier.
The cost of services, which are increasingly driving consumer inflation, rose 0.4 percent last month, driven by higher prices for public transportation, car rentals and some financial services.
Still, there were a few encouraging signs in Wednesday’s report. Wholesale food costs were flat from a month earlier, after a 1.3 percent spike the previous month. Moreover, wholesale goods prices overall fell 1.2 percent, suggesting that goods prices for consumers could soon decline.
On Tuesday, the government reported that consumer inflation last month rose across most sectors. Apart from cheaper gas, consumer prices for everything from food and rent to furniture, medical care and new vehicles were pricier last month.
The worse-than-expected consumer price spikes sent the stock market tumbling to its worst day in more than two years on fears that the US Federal Reserve would turn even more aggressive in raising interest rates to fight inflation.
Wednesday’s producer price data capture inflation at an earlier stage of production and can often signal where consumer prices are headed. It also feeds into the Fed’s preferred measure of inflation, which is called the personal consumption expenditures price index.
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