U.S. producer prices unexpectedly fell in August, with PPI slipping -0.1% mom versus expectations of a 0.3% mom gain. The decline was driven by a -0.2% mom drop in final demand services, while goods prices edged higher by 0.1% mom.
On a year-over-year basis, PPI slowed sharply to 2.6% yoy from yoy 3.3% in July, undershooting forecasts of 3.3% yoy and signaling easing price pressures at the factory gate. The slowdown will be welcomed by markets seeking evidence that inflationary pressures are moderating.
However, underlying measures stayed firmer. Core PPI, excluding food, energy, and trade services, rose 0.3% mom, a fourth straight month of increase, leaving the annual rate at 2.8% yoy — the fastest since March.
