Minneapolis ( Business) — Just a day after August’s disappointing Consumer Price Index report triggered a crash on Wall Street, another report on inflation indicated that rising wholesale prices are showing signs of improvement.
The Producer Price Index, which records the average changes in prices paid to producers of goods and services, increased by 8.7% in the 12 months ending in August.
Prices fell 0.1% in the month from July to August, according to data from the Bureau of Labor Statistics released Wednesday.
Economists had expected the PPI to rise 8.8% year-on-year and fall 0.1% from July, according to Refinitiv estimates.
Because the PPI captures price changes that occur higher up, the report is seen by some as a leading indicator of broader inflation trends and what consumers might see in stores.
Excluding the more volatile food and energy components, the core PPI rose 0.2% from July and 8.1% in the 12 months ending August.
Tuesday’s report on the CPI showed that annual price inflation reached 8.3% in August. Although this figure is lower than that of July (8.5%), the data also showed that the core CPI, which excludes volatile gasoline and food prices, increased at twice the expected rate, dashing hopes. that inflation has peaked.
In recent months, the United States has been battling decades-old inflation, with the Federal Reserve implementing a series of historic rate hikes in a bid to slow the economy and discourage further spending.
Meanwhile, consumers are paying hundreds of dollars more each month as prices for food, housing and health care soar.
This week’s two key inflation reports will provide crucial context for Fed policymakers who meet next week to determine the scope of the central bank’s next rate hike.
Tuesday’s CPI report has already prompted some analysts to call for a 100 basis point hike, versus recent expectations for a third straight 75 basis point rise.
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