Producer price index up 0.2% in August

WASHINGTON — Higher energy costs led to prices at the wholesale level rising in August at the fastest pace in four months.

The Labor Department said Wednesday that its producer price index, which measures inflation pressures before they reach the consumer, rose 0.2 percent last month. It was the largest monthly increase since a 0.5 percent gain in April. Inflationary pressures have largely been subdued in recent months. Much of the increase in August came from a 3.3 percent surge in energy costs. Food expenses slipped in August, including a sharp 20.6 percent decline in wheat prices.

The survey was taken before Hurricanes Harvey and Irma struck the southern part of the United States, events that will likely cause prices to further rise in the coming months as the rebuilding process begins. Ian Shepherdson, chief economist at Pantheon Macroeconomics, said he is “braced” for a temporary “spike” in producer prices because of the hurricanes.

Core inflation, which excludes volatile food and energy costs, rose 0.1 percent last month. Over the past 12 months, wholesale prices are up a moderate 2.4 percent while core prices have risen 2.0 percent.

Despite the monthly increase, relatively low inflation has been a constant throughout the recovery from the recession. For the past five years, inflation has stayed below the Federal Reserve’s target of annual price gains of 2 percent.