WASHINGTON (dpa-AFX) - Largely reflecting a sharp pullback in prices for trade services, the Labor Department released a report on Wednesday unexpectedly showing a modest decrease by U.S. producer prices in month of August.
The Labor Department said its producer price index for final demand edged down by 0.1 percent in August after climbing by a downwardly revised 0.7 percent in July.
The dip surprised economists, who had expected producer prices to rise by 0.3 percent compared to the 0.9 percent jump originally reported for the previous month.
The report also said the annual rate of producer price growth slowed to 2.6 percent in August from a downwardly revised 3.1 percent in July.
Economists had expected the annual rate of producer price growth to remain unchanged compared to the 3.3 percent surge originally reported for the previous month.
'The August PPI provides yet another month of data suggesting that inflation pressure from tariffs is muted when looking at overall indexes, and that businesses are absorbing at least part of tariff costs,' said FHN Financial Economic Analyst Mark Streiber. 'Nothing in today's data should sway the Fed from cutting rates next week.'
The unexpected monthly decrease by producer prices came amid a dip by prices for services, which slipped by 0.2 percent in August after increasing by 0.7 percent in July.
Prices for travel services led the way lower, plunging by 1.7 percent, while prices for transportation and warehousing services jumped by 0.9 percent and prices for other services rose by 0.3 percent.
Meanwhile, the report said prices for goods inched up by 0.1 percent in August after rising by 0.6 percent in July despite a 0.4 percent decrease in energy prices.
The Labor Department also said core producer prices, which exclude prices for food, energy and trade services, increased by 0.3 percent in August after climbing by 0.6 percent in July.
The annual rate of growth by core producer prices crept up to 2.8 percent in August from 2.7 percent in July.
On Thursday, the Labor Department is scheduled to release a separate report on consumer price inflation in the month of August.
Copyright(c) 2025 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX
© 2025 AFX News
