U.S. wholesale prices rose 0.4 percent from July to August and 5.4 percent from a year earlier, according to the Labor Department’s producer price index. The annual rate accelerated from 4.8 percent in July after earlier summer cooling, remaining below the 5.9 percent peak recorded in May.
Associated Press linked much of the renewed pressure to oil and gas costs associated with the continuing Iran war and disruptions around major shipping routes. U.S. crude traded above $100 a barrel Thursday, while AAA data cited by AP showed regular gasoline prices 44 percent higher than before the February attacks on Iran.
The producer index measures prices before they reach consumers and can capture changes in energy, transportation and wholesale margins earlier than consumer data. The report arrived as the administration intensified a trade conflict with Canada, adding tariffs as another possible source of business costs beyond energy.
A monthly increase does not translate uniformly into retail prices because businesses may absorb, delay or selectively pass through higher input costs. Energy prices affect not only gasoline but freight, aviation, farming, manufacturing and the cost of moving goods through domestic and international supply chains. Federal Reserve officials examine multiple inflation, labor and demand indicators rather than basing policy on a single producer-price release.
The 0.4 percent August monthly increase followed a 0.1 percent July gain, showing a renewed acceleration in the latest period even though annual inflation remained below its May peak.
At the edition deadline, future pass-through to consumer prices and interest rates could not be determined from the August producer index alone. The next documented developments will be the next consumer-price and personal-consumption inflation reports and oil, diesel and gasoline prices as military and shipping conditions change.