Inflation continues to persist as the Producer Price Index (PPI) for final demand in the United States increased by 0.2% in August 2024, surpassing market expectations of 0.1%, according to the U.S. Bureau of Labor Statistics. This follows a flat reading in July and a 0.2% rise in June. Over the past 12 months, the PPI has risen by 1.7% unadjusted, signaling ongoing inflationary pressure.
Core PPI, which excludes volatile food and energy prices, increased by 0.3%, beating the forecast of 0.2%. This indicates a broader rise in costs across the economy.
Breakdown of Final Demand:
Final Demand Services: Prices for services jumped 0.4% in August, rebounding from a 0.3% decline in July. The key driver was a 0.3% increase in services excluding trade, transportation, and warehousing. Trade margins rose by 0.6%, reflecting increased wholesale and retail profits, while transportation and warehousing services dipped by 0.1%.
Market Reaction: The higher-than-expected core PPI figure has raised concerns about persistent inflationary trends, which may influence future Federal Reserve policy decisions.
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