[News] U.S. PPI Slightly Increases in August as Services Prices Rebound

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The U.S. Producer Price Index (PPI) slightly increased in August, according to data released by the Bureau of Labor Statistics on September 12. The PPI rose by 0.2% month-over-month (previously 0%), exceeding market expectations of 0.1%. On a year-over-year basis, the PPI increased by 1.7% (previously 2.2%), falling short of the expected 1.8%, marking the lowest annual gain so far this year.

Breaking down the details, final demand goods prices remained flat month-over-month (previously up 0.6%), primarily due to a decline in energy prices, which dropped by 0.9% (previously up 1.8%). Excluding food and energy, prices rose by 0.2% for the month, posting the same increase as in the prior month.

Final demand services prices rose by 0.4% (previously down 0.3%), mainly driven by increases in other service categories, with guestroom rental prices contributing the most, surging by 4.8%. This mirrors the trend seen in the Consumer Price Index (CPI) data released a day earlier.

Overall, while the PPI demonstrated moderate growth in August, the Fed has shifted its focus on inflation towards the labor market. As a result, the inflation influence on future rate cuts has diminished. The market continues to anticipate a total of four 25-basis-point rate cuts throughout 2024, with expectations unchanged.