A bump in fuel prices helped nudge USA wholesale prices higher in August, to their biggest gain in four months, the Labor Department reported on Wednesday (Sep 13).
The increase followed a 0.1 per cent drop in the prior month, and was the largest since a gain of 0.5 per cent in April.
And wholesale gasoline prices rose 9.5 per cent for the month, the biggest increase since January.
A almost 10% jump in the cost of gas accounted for most of the increase in wholesale inflation last month.
The increase in producer prices was partly due to a jump in energy prices, which surged up by 3.3% in August after falling by 0.3% in the previous month. Food expenses slipped in August, including a sharp 20.6 per cent decline in wheat prices.
Economists had forecast the PPI gaining 0.3% last month and accelerating 2.5% from a year ago.
The increase in prices in August pushed the 12-month rate of wholesale inflation to 2.4% from 1.9%, just a tick below a five-year high.
Despite the monthly increase, relatively low inflation has been a constant throughout the recovery from the Great Recession will continue. But inflation-as measured at the consumer level-has undershot the central bank's projections this year. Core prices had been expected to rise by 0.2%.
Prices for iron and steel scrap rose in August as did the costs for industrial chemicals.
Inflation is being closely watched for clues on the timing of the next interest rate increase from the Federal Reserve. Many investors and analysts believe it could hike the rate against at a December meeting, but that depends in large part on whether inflation appears to be headed toward staying consistently at 2 per cent.