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Source: Newsmaker.id
US producer inflation rose in August, yet core price pressures were lower than market forecasts. The Producer Price Index (PPI) climbed 0.4% month-on-month, aligning with consensus and exceeding the revised 0.1% increase seen in July (data revised on Thursday, Sept. 10).
This marked the largest increase in three months. Goods prices surged 1.1% following declines in the previous two months, driven by a sharp 24.1% spike in diesel fuel prices. Meanwhile, service prices rose by only 0.1%.
Although the headline PPI indicated stronger price pressure, the Core PPI—which excludes food and energy—rose just 0.2% month-on-month. This figure represents a slowdown from July's 0.3% and fell short of the 0.3% market expectation.
On an annual basis, core producer inflation stood at 4.6%. The data suggests that the surge in energy prices has not fully permeated the underlying components of producer inflation, offering some indication that broader inflationary pressures remain relatively contained.
These results are significant ahead of Friday's Consumer Price Index (CPI) release and next week's Federal Reserve interest rate decision. Markets will assess whether rising energy costs are merely driving headline inflation or beginning to spill over into other goods and services.
Newsmaker Analysis: The PPI results present a mixed picture. The 0.4% headline figure indicates that inflation remains elevated; however, the lower-than-expected 0.2% Core PPI alleviates concerns regarding widespread price pressures. For the dollar and Treasury yields, the data did not signal as hawkish a stance as previously feared. Gold found some support as markets focused on the cooling core inflation, though its future direction remains heavily dependent on the upcoming CPI data. (arl)
Source: Newsmaker.id