Wednesday, September 14, 2022 05:38 AM

A measure of US producer prices fell for a second month in August as fuel costs continued to retreat, though an underlying measure of wholesale costs firmed in a sign of persistent inflation in the production pipeline.

The producer price index for final demand decreased 0.1% from a month earlier and increased 8.7% from a year ago, Labor Department data showed Wednesday. Excluding the volatile food and energy components, the so-called core PPI climbed a larger-than-forecast 0.4% in August and was up 7.3% from a year earlier.

The figures come on the heels of hotter-than-expected consumer price data and feed into mounting concerns about the breadth and pace of US inflation. While gasoline prices eased in the month, producers faced higher costs for services and some goods.

With inflation poised to be elevated for some time, the Federal Reserve is expected to raise interest rates by another 75 basis points at their meeting next week, marking the third-straight historically large increase.

Consumer price index data out Tuesday showed inflation picked up in August as widespread price pressures — from rent to food to utilities — offset a sizable decline in gasoline prices. Rising costs at the producer level tend to feed into consumer prices, but the CPI report also showed how household demand is playing into price increases.

Read more: Inflation Surprise Puts Onus on Fed to Hit Brakes Even Harder

Wednesday’s report showed goods prices fell 1.2% as gasoline prices continued to fall. Food prices were unchanged from the prior month. Excluding food and energy, the index of goods costs rose 0.2% for a second month.

Services prices increased 0.4%, the most in three months. Forty percent of the gain was due to higher margins for fuel retailers.