U.S. prices at the wholesale level unexpectedly rose in August and underlying producer prices rebounded, but experts say that data will not change financial market expectations that the Federal Reserve will cut interest rates again next week to support a slowing economy.
The U.S. Labor Department said its producer price index for final demand edged up 0.1% last month as a jump in the cost of services offset the largest drop in the price of goods in seven months. That followed a 0.2% gain in July.
In the 12 months through August, the PPI advanced 1.8% after increasing 1.7% in July. Economists had forecast the PPI would be unchanged in August and rise 1.7% on a year-on-year basis.
Excluding the volatile food, energy and trade services components, producer prices jumped 0.4% last month after dipping 0.1% in July, the first decline since October 2015.
The so-called core PPI climbed 1.9% in the 12 months through August after increasing 1.7% in July.
The Fed, which has a 2% annual inflation target, tracks the core personal consumption expenditures (PCE) price index for monetary policy. The core PCE price index increased 1.6% on a year-on-year basis in July and has undershot its target this year.
