Wholesale prices rose in line with expectations in August, the final inflation data point as the Fed prepares to cut interest rates.
this producer price indexThe U.S. Bureau of Labor Statistics said Thursday that a measure of the cost of final demand goods and services received by producers increased 0.2% this month. This was in line with the Dow Jones consensus forecast.
Excluding food and energy, PPI rose 0.3%, slightly higher than the market consensus of 0.2%. Excluding trade services, core growth was the same.
The overall 12-month PPI rose 1.7%. Excluding food, energy and trade, the annual growth rate was 3.3%.
In other economic news Thursday, the Labor Department said Initial application for unemployment benefits The total number for the week ended September 7 was 230,000, an increase of 2,000 from the previous period and above expectations of 225,000.
stock market futures Little changed after the report was released, with Treasury yields mostly falling.
Within the Producer Price Index (PPI) indicator, services prices drove most of the gains, rising 0.4% on the month, driven by growth in services minus trade, transport and warehousing. Another important contributor was the 4.8% increase in room rental rates.
Commodity prices were unchanged from July, reversing July’s 0.6% gain.
The news comes a day after the Bureau of Labor Statistics reported Consumer prices rose 0.2% This month was in line with expectations. However, the report also showed that core prices rose 0.3%, slightly higher than expected, driven primarily by higher housing-related costs.
On an annual basis, headline consumer price index (CPI) inflation fell to 2.5%, while core inflation remained at 3.2%.
Neither report is expected to prevent the Fed from lowering its benchmark interest rate by a quarter of a percentage point when its two-day policy meeting ends on Wednesday. The central bank’s main overnight borrowing rate currently targets a range of 5.25%-5.5%.
Markets are pricing in some uncertainty about how much the central bank will cut rates, but recent data and statements from policymakers have prompted Wall Street to consider a more traditional move of a quarter of a percentage point rather than a more aggressive half-percentage point move. Cut interest rates.
Fed officials have recently turned more of their attention to the slowing labor market.
The jobless claims report showed that while weekly job losses have risen slightly over the past few months, there has been no surge.
Continuing claims, which trailed one week, edged up to 1.85 million, an increase of just 5,000 from the previous period.
