U.S. Producer Prices Advance More Than Expected Amid Spike In Energy Prices

(RTTNews) - Reflecting a spike in energy prices, the Labor Department released a report on Thursday showing producer prices in the U.S. increased by more than expected in month of August.

The Labor Department said its producer price index for final demand advanced by 0.7 percent in August after climbing by an upwardly revised 0.4 percent in July.

Economists had expected producer prices to rise by 0.4 percent compared to the 0.3 percent increase originally reported for the previous month.

The report also said the annual rate of producer price growth doubled to 1.6 percent in August from 0.8 percent in July. The annual rate of growth was expected to accelerate to 1.2 percent.

The stronger than expected monthly price growth came as energy prices skyrocketed by 10.5 percent in August after climbing by 0.8 percent in July.

Meanwhile, the Labor Department said food prices declined by 0.5 percent in August after rising by 0.4 percent in July.

The report also said prices for services edged up by 0.2 percent in August following a 0.5 percent increase in the previous month.

While prices for trade services fell by 0.3 percent, prices for transportation and warehousing services jumped by 1.4 percent and prices for other services rose by 0.3 percent.

Excluding prices for food, energy, and trade services, core producer prices climbed by 0.3 percent in August, matching the increase in July.

The annual rate of growth by core producer prices ticked up to 3.0 percent in August from 2.9 percent in July, reflecting the fastest growth since April.

The Labor Department released a more closely watched report on Wednesday showing U.S. consumer prices increased in line with economist estimates in the month of August.

The report said the consumer price index climbed by 0.6 percent in August after inching up by 0.2 percent in July. The price growth matched expectations.

Excluding food and energy prices, core consumer prices rose by 0.3 percent in August after edging up by 0.2 percent in July. Economists had expected another 0.2 percent uptick.

The Labor Department also said the annual rate of consumer price growth accelerated to 3.7 percent in August from 3.2 percent in July. The annual rate of growth was expected to accelerate to 3.6 percent.

Meanwhile, the report said the annual rate of growth by core consumer prices slowed to 4.3 percent in August from 4.7 percent in July, in line with economist estimates.