Wholesale inflation eased in August for a second straight month, although prices for everyday necessities remain at a multi-decade high, squeezing businesses and millions of American households. The Labor Department announced on Wednesday that its producer price index, which measures inflation at the wholesale level before reaching consumers, it fell 0.1% in August from the previous month. Year-on-year, prices rose 8.7% – a significant drop from the 9.8% increase recorded in July and the lowest level since August 2021. Economists polled by Refinitiv had expected an annual rise of 8.8% and a monthly decline of 0.1%. Excluding food, energy and trade services, wholesale inflation rose 0.2% for the month. That’s below expectations for a 0.3% gain. Over the past 12 months, core prices have increased by 5.7%. AMERICANS’ INFLATION EXPECTATIONS CUT AGAIN IN AUGUST, NEW YORK FED SAYS “There is a divergence in the makeup of core inflation and core inflation, where the headline is cooling and the core is heating up,” said Jamie Cox, managing partner at Harris Financial Group. “This is a curious phenomenon and is likely influenced by the shift from goods to services after the pandemic.” Overall, goods prices fell 1.2% last month, the biggest contributor to the decline in headline inflation. This decline can largely be traced to a 6% plunge. prices for final demand energy, including a stunning 12.7% drop in gasoline prices, according to the Labor Department. Food prices remained stable in August and did not increase compared to the previous month. Billionaire David Rubenstein Warns Inflation Will Be ‘Hard’ For Fed To Cut Meanwhile, the services index rose 0.4% in August, for the fourth consecutive increase. Most of that increase came from a 0.8% rise in commercial services. A worker prepares to grate onions onto a pallet at a wholesale produce market in the Union Market district in Washington, DC, U.S., Tuesday, August 30, 2022. (Photo by Al Drago/Bloomberg via Getty Images/Getty Images) Those numbers come just a day after the Labor Department reported that the consumer price index for August was higher than expected. Both data releases are considered important measures of inflation, with the CPI seen as a good leading indicator of inflationary pressures as costs fall to consumers. CLICK HERE TO READ MORE ABOUT FOX BUSINESS Stocks fell sharply on Tuesday after a surprisingly hot report on fears of an even more aggressive Federal Reservewith the Dow Jones Industrial Average sliding 1,276 points – its worst day since June 2020. The S&P 500, meanwhile, fell 4.32% while the Nasdaq Composite sank 5.16%. Ticker Security Last Change %I:DJI DOW JONES AVERAGES 31055.64 -49.33 -0.16%I:COMP NASDAQ COMPOSITE INDEX 11637.137597 +3.56 +0.03%SP500 S&P -92.6% 500 . Markets opened slightly higher on Wednesday. Investors are now betting that the central bank’s policymakers will approve a third consecutive rate hike of 75 basis points when they meet again on September 20-21 – or go even further with a historic 100 basis point hike.
