downwardly revised 3.1% in July<\/a>, according to Bureau of Labor Statistics data.\n <\/p>\n\n Helping to drive prices lower was a 1.7% drop in trade services, a category reflective of changes in retailers and wholesalers\u2019 gross profit margins.\n <\/p>\n
\n If margins are shrinking, it could be an indication that businesses are using those to eat higher costs \u2014 such as those from steep tariffs \u2014 and ultimately pass more of those costs to consumers or make cutbacks elsewhere, economists have said.\n <\/p>\n
\n The trade services category can be highly volatile; however, August\u2019s estimated drop is the biggest monthly decline in more than a year. (PPI data is revised the following month as more comprehensive information becomes available from businesses).\n <\/p>\n
\n When excluding highly volatile components like trade services, as well as food and energy, the underlying inflation trend appears less rosy: Prices rose 0.3% from July and ticked up to 2.8% for the 12 months ended in August.\n <\/p>\n
\n Still, Wednesday\u2019s report painted a picture of inflation not drastically escalating at the wholesale level at a time when President Donald Trump\u2019s tariffs have settled in more firmly. The softer wholesale inflation dynamic bolstered investors\u2019 expectations that the Federal Reserve will follow through cutting interest rates later this month.\n <\/p>\n
\n \u201cThe tariff effect is not boosting across-the-board price pressures yet,\u201d Christopher Rupkey, chief economist at FwdBonds, wrote Wednesday in a note. \u201cEconomists will still caution markets that core producer goods prices are rising significantly at the producer level, so the country is not out of the woods from the inflation threat.\u201d\n <\/p>\n
\n \u201cBut the warnings are falling on deaf ears as far as investors are concerned. As time goes on, one has to wonder if there are slow-growth reasons and weak economic demand that is keeping inflation in check,\u201d he added.\n <\/p>\n
\n Stocks were mixed. The Dow fell 65 points, or 0.14%. The S&P 500 and Nasdaq each gained 0.4%. Treasury yields fell.\n <\/p>\n
\n Economists were expecting that the overall PPI, which measures the change in prices received by producers of goods and services, would increase by 0.4% on a monthly basis and hold unchanged at the previously estimated 3.3% from a year ago, according to FactSet estimates.\n <\/p>\n
\n Economists expected that a core measurement of PPI that excludes food and energy would slightly increase on an annual basis. Wednesday\u2019s report showed that core PPI excluding food and energy (but still including trade services) fell 0.1% and slowed to 2.8%.\n <\/p>\n
\n Wholesale consumer durable goods prices increased by 0.3% for the third consecutive month, a likely indication of tariff-related effects.\n <\/p>\n
\n PPI serves as a potential bellwether for the prices consumers may see in the months ahead.\n <\/p>\n
\n \u201cProducer prices for goods continue to rise steadily in response to the tariffs,\u201d Samuel Tombs, chief US economist at Pantheon Macroeconomics, wrote Wednesday. \u201cCommodity prices, however, are flat, shipping costs have returned to their lowest levels since their post-pandemic surge, and the dollar has held its value against other currencies since June. So core goods PPI inflation should ease after producers have finished passing on tariff costs in a few months\u2019 time.\u201d\n <\/p>\n
\n And for American consumers, prices have been rising faster than normal in recent months as more businesses have started to pass along the costs from steep import tariffs. Sharply rising goods prices have put upward pressure on overall inflation.\n <\/p>\n
\n To what extent that trend continued in August will be much clearer on Thursday, when the BLS releases the latest Consumer Price Index data.\n <\/p>\n
\n The most widely used inflation gauge is expected to show that prices rose 0.3% in August, a faster monthly pace than the 0.2% rate in July and that annual inflation would likely rise to 2.9%, its highest since January.\n <\/p>\n","protected":false},"excerpt":{"rendered":"Facebook Tweet Email Link US inflation cooled off at the wholesale level in August, bolstering hopes that high…\n","protected":false},"author":2,"featured_media":134095,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46],"class_list":["post-134094","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/134094","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=134094"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/134094\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/134095"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=134094"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=134094"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=134094"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}