US Produces Prices Flat in August Easing Fed Need to Hike

U.S. producer prices were flat in August, pointing to muted inflation pressures that should see the Federal Reserve in no hurry to raise interest rates.

The Labor Department said on Tuesday its producer price index for final demand was unchanged as gasoline and food costs fell. Producer prices had edged up 0.1 percent in July. Economists had expected a 0.1 percent increase last month.

In the 12 months through August, producer prices increased 1.8 percent after rising 1.7 percent in July.

 
The report came as Fed officials were due to start a two-day policy meeting. Data on retail sales, manufacturing, the services sector and housing have suggested the economy is on a sustainable growth path.

The tame producer prices report, however, implies the U.S. central bank could bide its time before lifting its benchmark overnight lending rate from near zero, where it has been since December 2008.

Last month, prices at the factory gate were held back by a 1.4 percent decline in gasoline prices, which followed a 2.1 percent fall in July.

Food prices slipped 0.5 percent after rising 0.4 percent in July. Prices received for services at the final demand level increased 0.3 percent after nudging up 0.1 percent in July.

via Reuters

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.