Wholesale inflation declines in August, but prices remain near multi-decade high

 UBS managing director and senior portfolio manager Jason Katz provides insight on the market’s response to the Fed on ‘Making Money.’ Inflation at the wholesale level cooled in August for the second consecutive month, although prices for everyday necessities remain at a multi-decade high, squeezing businesses and millions of American households. The Labor Department said Wednesday that its producer price index, which measures inflation at the wholesale level before it reaches consumers, declined 0.1% in August from the previous month. On an annual basis, prices soared 8.7% – a marked decline from the 9.8% increase recorded in July and the lowest level since August 2021.Economists survey by Refinitiv excepted to see an annual gain of 8.8% and a monthly drop of 0.1%. Excluding food, energy and trade services, inflation at the wholesale level increased 0.2% for the month. That is below the expectation for a gain of 0.3%. Over the past 12 months, core prices climbed 5.7%.  Overall, prices for goods fell 1.2% last month, the biggest contributor to the drop in the headline inflation figure. That decrease can largely be traced to a 6% plunge in prices for final demand energy, including a stunning 12.7% decline in gasoline prices, according to the Labor Department.This is a developing story. Please check back for updates.

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