Just one day after a disappointing Consumer Price Index report for August caused havoc on Wall Street, a separate inflation report indicated that increases in wholesale prices are showing signs of improvement.
The Producer Price Index, which tracks changes in average prices paid to producers of goods and services, rose 8.7%. in the 12 months ended August. Prices down 0.1% in the month of July to August, according to data provided by the Bureau of Labor Statistics published on Wednesday.
Economists had expected PPI to rise 8.8% year-on-year and fall 0.1% from July, according to Refinitiv estimates.
Because the PPI captures higher price changes, the report is seen by some as a leading indicator of broader inflation trends and what consumers may see at the store level.
Excluding the more volatile food and energy components, core PPI rose 8.1% from July and 0.2% in the 12 months to August.
Tuesday’s hot CPI report showed annual price inflation reached 8.3% in August. Although down from July’s 8.5%, the data also showed that the core CPI, which strips out volatile gas and food prices, rose at twice the expected rate, amid expectations that inflation had peaked.
As America grapples with decades of inflation, the Federal Reserve has set a series of historic rate hikes in recent months in an effort to slow the economy and encourage more spending.
Meanwhile, consumers are paying hundreds of dollars more each month as prices for food, shelter and healthcare rise.
This week’s two key inflation reports will provide crucial context for Fed officials as the central bank meets next week to determine the direction of the next rate hike. Tuesday’s CPI report has already prompted some analysts to call for a 100-basis-point increase, above third-party expectations of 75 basis points.
This story is developing and will be updated.