The prices that producers receive for goods and services in final demand rose in August to the highest annual rate since at least 2010, the Labor Department reported on Friday.
The producer price index rose 0.7% during the month, above the Dow Jones estimate of 0.6%, but below the 1% increase in July.
Year-on-year, the level rose 8.3%, the largest annual increase since records until November 2010. It did so after a 7.8% increase in July, which also set a record.
The data comes from heightened inflation fears caused by supply chain issues, a shortage of various consumer and manufactured goods, and increased demand related to the Covid-19 pandemic. Federal Reserve officials expect inflationary pressures to ease over the course of the year, but they have persisted, with Friday’s numbers suggesting the trend is likely to continue.
Excluding food, energy and trading services, final demand prices rose 0.3% for the month, below the Dow Jones estimate of 0.5%. Still, the core PPI was up 6.3% year over year, also the largest record increase for data dating back to August 2014.
End-demand services increased 0.7% over the month, thanks to a 1.5% increase in trade services or margins generated by wholesalers and retailers. Transport and storage costs rose by 2.8%.
About a third of the total profit came from the health, beauty and optics sectors, which increased by 7.8%. The prices for outpatient hospital care dampened growth and fell by 1.5%.
Final demand goods prices rose 1% during the month, primarily driven by a 2.9% increase in food, which in turn was due to an 8.5% increase in meat prices. Slaughtered poultry prices increased by 11%. The prices of iron, steel and diesel fuel fell.
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