WASHINGTON, Thu Sep 13, 2012 – Producer prices rose by the most in three years in August as the cost of energy surged, a government report showed on Thursday, but underlying inflation pressures were contained.
The Labor Department said its seasonally adjusted producer price index increased 1.7 percent last month, the largest gain since June 2009 and accelerating from July’s 0.3 percent rise.
Economists polled by Reuters had expected prices at farms, factories and refineries to rise 1.1 percent last month.
Wholesale prices excluding volatile food and energy costs rose 0.2 percent, slowing from a 0.4 percent increase in July. The rise matched economists’ expectations.
Despite the rise in overall wholesale inflation last month, there is likely to be little pass-through to consumers given sluggish job growth and tepid domestic demand.
Consumer inflation is currently below the Federal Reserve’s 2 percent target. Officials from the U.S. central bank were meeting for a second day on Thursday to deliberate on policy.