SUMMARY: Wholesale inflation re-accelerated in August, driven by energy. Headline PPI rose 0.4% MoM / 5.4% YoY, up from 0.1% and 4.8% in July. Core (ex food and energy) rose 0.2% MoM / 4.6% YoY.
What moved
- Energy was the main driver: final-demand goods +1.1%; energy +4.2%. Diesel jumped 24.1% MoM (~78% YoY) and accounted for more than a third of the goods increase. Gasoline, jet fuel, and heating oil also rose. Electric utility prices fell.
- Transportation and warehousing +2.3% MoM (truck freight up), which feeds into shipping costs for goods.
- Food only +0.1% MoM.
- Services overall +0.1%. Other hot spots in the article (airfares, hospital care, electronic components tied to AI data-center demand) fit the “broader than just oil” concern.
Why it matters PPI is an upstream input into PCE, the Fed’s preferred inflation gauge (Sept. 30). Friday’s CPI is the bigger market event. Officials split: Chair Warsh said the Fed must be “confident that underlying inflation is moving” to 2% or “we have work to do.” Waller and others have said a cool CPI would support a hold next week. Headline heat is energy/geopolitics (Iran conflict, oil >$100); the open question is whether it is spreading. Core and PPI ex food/energy/trade (+0.3% MoM / 4.7% YoY) are still well above target.
Context Tariffs (including Canada) and high energy keep cost-push risk alive. Food cooling is the one soft signal for grocery prices. Political overlay: elevated prices into midterms.
Bottom line: Energy shock re-lit headline PPI. Core did not accelerate on the month, but the annual
https://www.theglobeandmail.com/business/article-us-wholesale-prices-ppi-august
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