United States wholesale prices rose in August, according to data released Thursday that could play a key role in the Federal Reserve's upcoming interest rate decision.
The producer price index (PPI), a measure of final demand costs for goods and services and a gauge of pipeline cost pressures, increased a seasonally adjusted 0.4% for the month, the Bureau of Labor Statistics reported.
On an annual basis, PPI rose 5.4%, remaining well above the Fed's 2% inflation target and slightly exceeding the 5.3% forecast.
The PPI rose 0.1% in July, a slight upward revision from the original estimate of no change.
Excluding food and energy, core PPI accelerated 0.2%, below the forecast for a 0.3% increase. Core PPI less trade services, another volatile category, rose 0.3%, in line with estimates.
Energy prices in particular, along with goods prices overall, were responsible for most of the PPI increase.
Final demand energy prices rose 4.2%, driven largely by soaring diesel prices, which surged 24.1%. Goods prices broadly increased 1.1%.
Services prices rose just 0.1%, with a 2.3% increase in transportation and warehousing accounting for much of the move.
Portfolio management costs, a closely watched metric in the PPI calculations, fell 1.6% for the month but were still up 18.8% from a year ago.
There were further signs of pipeline pressures, with processed goods prices increasing 1.8% while unprocessed goods prices accelerated 1.1%.
The report comes less than a week before central bankers are due to announce their interest rate decision.
A separate report on the consumer price index will be released Friday. CPI is expected to show headline annual inflation of 3.4%, while core inflation is forecast at 2.4%.
Both BLS measures feed into the Fed's primary inflation gauge, the personal consumption expenditures price index, although that data will not be released until later in the month, after next week's policy meeting.
After keeping rates on hold throughout 2026, the Fed is expected to approve a quarter-percentage-point increase in its benchmark interest rate, although market pricing has been volatile.
Traders slightly increased their bets on a rate increase following the PPI release, putting the odds at 71.3%, according to the CME Group FedWatch Tool.
