Prices that producers get for final demand goods and services surged in August at their highest annual rate since at least 2010, the Labor Department reported Friday.
The producer price index rose 0.7% for the month, above the 0.6% Dow Jones estimate, though below the 1% increase in July.
On a year-over-year basis, the gauge rose 8.3%, which is the biggest annual increase since records have been kept going back to November 2010. That came following a 7.8% move higher in July, which also set a record.
The data comes amid heightened inflation fears fed by supply chain issues, a shortage of various consumer and producer goods and heightened demand related to the Covid-19 pandemic. Federal Reserve officials expect inflationary pressures to ease through the year, but they have remained stubbornly persistent, with Friday’s numbers indicating that the trend likely will continue.
Excluding food, energy and trade services, final demand prices increased 0.3% for the month, below the 0.5% Dow Jones estimate. Still, that left core PPI up 6.3% from a year ago, also the largest record increase for data going back to August 2014.
Final demand services rose 0.7% for the month, thanks to a 1.5% gain in trade services, or the margins received by wholesalers and retailers. Transportation and warehousing costs surged 2.8%.
About one-third of the overall gain came from health, beauty and optical goods, which jumped 7.8%. Prices related to outpatient hospital care held back the gains, falling 1.5%.
Prices for final demand goods rose 1% for the month, pushed primarily by a 2.9% gain in foods which in turn came from an 8.5% surge in meat prices. Slaughtered poultry prices surged 11%. Prices fell for iron, steel and diesel fuel.