United States producer prices dropped by 0.1% in August, their first decline since April, in a sign of weakening demand.
This was below Dow Jones estimates of a 0.3% increase. Excluding food, energy, and trade services, the Producer Price Index rose by 0.3%, according to the Bureau of Labor Statistics (BLS).
The August decline “is attributable to a 0.2% decline in prices for final demand services,” said the BLS. Final demand goods and services are used in the U.S. without further processing.
“Three quarters of the August decrease in prices for final demand services can be attributed to a 3.9% decline in margins for machinery and vehicle wholesaling.”
Producer goods prices rose by 0.1% last month, or by 0.3% excluding food and energy. U.S.-produced energy prices were down 0.4%.
In the 12 months to August, the Producer Price Index excluding food, energy, and trade services was up 2.8%. This is the largest yearly increase in 17 months.
Wholesale prices rose by 0.7% in July and 0.1% in June, the BLS said.
The Consumer Price Index is also due this week. In July, the Consumer Price Index was up 0.2% monthly and 2.7% for the previous 12 months.
The Federal Reserve will meet on 16-17 September to consider a rate cut, with markets largely expecting an 0.25% cut amid a softening labour market.
U.S. President Donald Trump again called for a rate cut after the Producer Price Index’s release, writing on Truth Social that Fed Chair Jerome Powell “must lower the RATE, BIG, right now”.
The S&P 500 finished 0.3% higher following the report, with the Nasdaq up 0.03%. The Dow Jones fell by 0.48%.
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