Prices producers get for final demand for goods and services rose in August at their highest annual rate since at least 2010, the Department of Labor reported Friday.
The producer price index rose 0.7% for the month, above the Dow Jones estimate of 0.6%, but below the 1% increase in July.
Year-on-year, the indicator rose 8.3%, which is the largest annual increase since records were recorded in November 2010. This came after a 7.8% increase in July, which also has established a record.
The data comes amid growing fears of inflation fueled by supply chain problems, a shortage of various consumer goods and manufacturers, and an increase in demand linked to the Covid-19 pandemic. Federal Reserve officials expect inflationary pressures to ease over the year but have remained stubbornly persistent, with Friday’s numbers indicating the trend is likely to continue.
Excluding food, energy and commercial services, final demand prices rose 0.3% for the month, below the Dow Jones estimate of 0.5%. However, this left the core PPI up 6.3% from a year ago, also the largest record increase for data dating back to August 2014.
Final demand services grew 0.7% in the month, thanks to a 1.5% increase in commercial services, or the margins received by wholesalers and retailers. Transportation and storage costs increased by 2.8%.
About a third of the overall gain came from health, beauty and optical products, which increased by 7.8%. Prices for outpatient hospital care held back earnings, dropping 1.5%.
Prices for final demand goods rose 1% in the month, driven mainly by a 2.9% increase in food which in turn resulted from an 8.5% increase in meat prices. Prices for slaughtered poultry increased by 11%. Prices fell for iron, steel and diesel.
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