(The Center Square) – Newly released federal inflation data shows that producer prices spiked in August, undoing a steady downward inflationary trend.
The U.S. Bureau of Labor Statistics released its Producer Price Index Thursday, a key marker of inflation, which showed producer prices rose 0.7% in August alone. Much of that increase came because of an rise in the cost of gasoline.
“Over 60% of the August rise in the index for final demand goods can be traced to prices for gasoline, which jumped 20%,” BLS said. “The indexes for diesel fuel, jet fuel, home heating oil, beverages and beverage materials, and iron and steel scrap also moved higher. Conversely, prices for fresh and dry vegetables fell 11.5%. The indexes for residential electric power and for industrial chemicals also decreased.”
Experts had celebrated the slowing of inflation over the last year, but these latest numbers, which are much higher than expected, potentially signal a reversal of that improvement.
The producer prices comes right after BLS released its Consumer Price Index, which saw a 0.6% spike in August as well, the biggest increase this year.
“The index for gasoline was the largest contributor to the monthly all items increase, accounting for over half of the increase,” BLS said. “Also contributing to the August monthly increase was continued advancement in the shelter index, which rose for the 40th consecutive month. The energy index rose 5.6% in August as all the major energy component indexes increased. The food index increased 0.2% in August, as it did in July.”
According to AAA, the national average price for a gallon of regular gasoline is $3.86, up from $3.80 a week ago, though about the same as the average one month ago. Diesel prices are currently an average of $4.53 per gallon, up from $4.51 one week ago and $4.31 one month ago.