Wholesale inflation eases in August, but prices remain near multi-decade highs

Wholesale inflation fell in August for a second straight month, even as prices of daily necessities remain at multi-decade highs, squeezing businesses and millions of American households.

The Labor Department said Wednesday that its producer price index, which measures inflation at the wholesale level before it reaches consumers, fell 0.1% in August from the previous month. On a year-on-year basis, prices rose 8.7% – a sharp drop from the 9.8% increase recorded in July and the lowest level since August 2021.

Economists’ survey from Refinitiv excepted to see an annual gain of 8.8% and a monthly decline of 0.1%.

Excluding food, energy and trade services, wholesale inflation rose 0.2% for the month. This is below the expectation of a gain of 0.3 per cent. Over the past 12 months, core prices have risen 5.7%.

Overall, goods prices fell 1.2% last month, the biggest contributor to the decline in headline inflation. This decline can largely be traced to a 6% dip prices for final energy demandincluding an astonishing 12.7% drop in gasoline prices, according to the Labor Department.

This is a development story. Please check back for updates.