The producer price index for final demand rose 0.4% in August on a seasonally adjusted basis, the Bureau of Labor Statistics reported Thursday, putting annual wholesale inflation at 5.4% — the highest 12-month reading this year.
The monthly gain accelerated from July, which was revised up to 0.1% from an initial estimate of no change. The annual figure of 5.4% compares with a 4.8% pace in July.
Energy was the dominant force behind August's monthly gain. Final-demand energy prices climbed 4.2%, with diesel fuel posting a 24.1% spike that alone explained more than a third of the total advance in goods prices. Goods prices overall were up 1.1% for the month; services added only 0.1%, with a 2.3% jump in transportation and warehousing doing most of the work on that side.
Excluding food and energy, core PPI rose 0.2% for the month and 4.6% from a year earlier, according to Bloomberg. The index for final demand less foods, energy, and trade services — another measure of underlying inflation — rose 0.3% in August and 4.7% over the past 12 months, according to the BLS.
Further up the supply chain, price pressures were more intense. The index for processed goods for intermediate demand rose 1.8% in August and 11.5% over the past 12 months. Unprocessed goods for intermediate demand gained 1.1% for the month and 12.8% on an annual basis. Diesel fuel was a major factor in both categories.