The Washington Post

Producer prices rise as inflation persists

-

U.S. producer prices increased solidly in August, leading to the biggest annual gain in nearly 11 years, suggesting that high inflation is likely to persist for a while as the unrelentin­g coronaviru­s pandemic continues to pressure supply chains.

There are, however, signs that inflation could be nearing its peak, with the report from the Labor Department on Friday showing underlying producer prices rising at their slowest pace in nine months in August. High inflation is eroding households’ purchasing power, contributi­ng to the downgradin­g of economic-growth estimates for the third quarter.

The producer price index (PPI) for final demand rose

0.7 percent last month after two straight monthly increases of 1 percent. The gain was led by a 0.7 percent advance in services following a 1.1 percent jump in July.

Trade services, which measure changes in margins received by wholesaler­s and retailers, accounted for two-thirds of the broad rise in services. Goods prices jumped 1 percent after climbing 0.6 percent in July. In the 12 months through August, the PPI accelerate­d 8.3 percent, the biggest year-on-year advance since November 2010 when the series was revamped, after surging 7.8 percent in July.

Economists polled by Reuters had forecast the PPI gaining 0.6 percent on a monthly basis and rising 8.2 percent year-onyear.

Though surveys from the Institute for Supply Management this month showed that measures of prices paid by manufactur­ers and services industries fell significan­tly in August, they remained elevated. Factories and services providers still struggled to secure labor and raw materials, and faced logistics delays.

Newspapers in English

Newspapers from United States