The Producer Price Index for final demand increased 0.7 percent in August, seasonally adjusted, after
rising 0.4 percent in July, the U.S. Bureau of Labor Statistics reported today. (See table A.) The August
advance is the largest increase in final demand prices since moving up 0.9 percent in June 2022. On an
unadjusted basis, the index for final demand rose 1.6 percent for the 12 months ended in August.
In August, 80 percent of the rise in final demand prices is attributable to a 2.0-percent jump in the index
for final demand goods. Prices for final demand services advanced 0.2 percent.
[So much for the explanation yesterday that CPI inflation spiked because of service prices. PPI gives us a 2-3 month preview of where CPI will be headed. The impact of both reports will likely be felt first at the Fed, where they will anticipate a bad report on PCE index inflation later this month. However, this will once again raise questions about White House gaslighting on Bidenomics. — Ed]
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