Prices charged by U.S. businesses jumped higher than expected in August, data from the Department of Labor said Friday.
The Bureau of Labor Statistics’ Producer Price Index rose 0.7 percent compared with July. Compared with a year ago, the index is up 8.3 percent, the fastest pace of price increases in data going back to 2010.
Economists had forecast PPI to rise by 0.6 percent on a monthly basis, down from the one percent rise reported for July and June. On an annual basis, prices were expected to be up 8.3 percent.
Prices for “final demand” services—those used for personal consumption or exports—rose 0.7 percent. The index for final demand goods moved up 1.0 percent.
Stripping out food and energy price increases, producer prices rose 0.6 percent on a monthly basis and 7.3 percent annually, a larger than expected year over year increase. Excluding trade services, which measure changes in margins of wholesalers and retailers rather than prices, as well as food and energy, producer prices rose 0.3 percent for the month and 6.3 percent for the year, also a larger annual increase than expected.
The Producer Price Index is an alternative gauge of inflation, measuring the prices received by businesses for goods and services rather than the prices paid by consumers. It actually predates the better-known Consumer Price Index. First published in 1902, it is the oldest continuous statistical series of the U.S. government. The index used to be known as the Wholesale Price Index, a somewhat misleading name since it was never focused on wholesale prices.
Because of changes in what gets counted, however, the headline “final demand” PPI data only dates back to around 2010 after a 2014 overhaul meant to update the index to better reflect the modern economy.