Wholesale inflation flattens out in August
By
WASHINGTON (MarketWatch) - Falling gasoline and food costs kept prices at the U.S. wholesale level unchanged in August, another sign of receding inflationary pressure.
The flat reading in the producer price index marks the first time in eight months that that gauge failed to show an increase, according to Labor Department data released Tuesday. Economists surveyed by MarketWatch had expected PPI to produce a flat reading.
Wholesale prices have risen an unadjusted 1.8% in the past 12 months. That's up from a comparable past-year reading of 1.7% in July but down from a 2 1/2-year high of 2% in May.
The price of goods fell 0.3% in August, the biggest drop in 14 months. Gasoline prices declined by 1.4% last month, and food costs slid 0.5%. The price of eggs sank 21.2%, and raw cotton tumbled almost 18%, marking the largest decline since 1986. Potato prices leaped 28%, however.
The cost of services, meanwhile, climbed 0.3%, although they reflect a smaller portion of the overall producer price index. Airline and hotel costs rose.
Excluding the volatile categories of food, energy and trade, 'core' wholesale prices rose 0.2%.
Personal consumption, an index designed to foreshadow changes in the consumer price index, edged up 0.1% in May.
Changes in wholesale costs often filter down to consumers, but the relationship is not exact. Companies raise or lower prices for a number of reasons.
The true cost to Americans is better seen through the consumer price index, which measures what people actually pay. The consumer price index, released Wednesday, is also forecast to have been unchanged in August.
Post a Comment for "Wholesale inflation flattens out in August"