WASHINGTON (Reuters) - U.S. producer prices rose a bit more than expected in August as the cost of services increased solidly, while underlying producer inflation continued to firm.
The producer price index for final demand rose 0.3% last month after surging 0.6% in July, the Labor Department said on Thursday. In the 12 months through August, the PPI fell 0.2% after dropping 0.4% in the 12 months through July.
Economists polled by Reuters had forecast the PPI would gain 0.2% in August and fall 0.3% on a year-on-year basis.
Producer prices were led by a 0.5% increase in services. Nearly 20% of the rise in services was attributed to
a 1.1% increase in margins for machinery, equipment, parts, and supplies wholesaling. Prices for goods edged up 0.1%.
Excluding the volatile food, energy and trade services components, producer prices rose 0.3% in August, advancing by the same margin for three straight months. In the 12 months through August, the core PPI gained 0.3%. The core PPI edged up 0.1% on a year-on-year basis in July.
The Federal Reserve tracks the core personal consumption expenditures (PCE) price index for its 2% inflation target, a flexible average. The core PCE price index climbed 1.3% in July after increasing 1.1% in June. August data is scheduled to be released at the end of the month.