Wholesale Inflation Rises to 5.4%, Pressuring Fed

Wholesale inflation accelerated in August as fuel prices tied to the war with Iran kept costs elevated, the Labor Department reported Thursday.

The producer price index, which measures inflation before it reaches consumers, rose 5.4% from a year earlier, up from 4.8% in July, according to the Associated Press. On a monthly basis, wholesale prices rose 0.4% from July to August, after a 0.1% increase the month before.

The monthly figure matched the 0.4% rise economists expected in the Dow Jones consensus forecast, CNBC reported. The New York Post called it the strongest increase in three months.

The Numbers

Excluding food and energy, core wholesale prices rose 0.2% from July to August — the same as the previous month — and 4.6% from a year earlier, up from 4.2% in July, per the AP.

Energy was the main driver. The wholesale price of diesel soared 24.1% from July to August and is up nearly 78% from a year earlier. Shipping prices rose 2.3% last month. Airfares, hospital care and electronic components also jumped, the AP reported, with electronics lifted by heavy spending on AI data centers.

Food prices ticked up just 0.1%, a possible signal grocery costs could cool, and electric utility prices declined.