- U.S. Producer Price Rises Less Than Forecast
Wholesale prices in the U.S rose less than projected in August, suggesting inflation pressures is still below Fed’s projection.
Producer prices rose 0.2 percent in August, up from 0.1 percent decline recorded in July, the Commerce Department said on Wednesday.
On a yearly basis, producer prices increased by 2.4 percent in August, still below the 2.5 percent expected by economists but higher than the 1.9 percent recorded in the preceding month.
Core producer price index, which excludes food and energy, climbed 0.1 percent in August, also missing 0.2 percent gain projected.
The figures were boosted by the jump in energy prices in August, cost of gasoline rose by 9.5 percent while jet-fuel costs advanced to the highest since 2009. The data compiled on August 15, didn’t capture the effects of Hurricane Harvey.
The relatively contained price pressures, keep the Federal Reserve’s preferred consumer-price below its target and the very reason policy makers plan to raise interest rate gradually.
U.S. dollar gained slightly against most of its counterpart immediately the report was published. The dollar rose against the pound to $1.3264 and $1.1952 against the Euro-single currency.
The less than expected price pressure bolstered dollar attractiveness marginally. However, investors would wait to access the consumer prices due on Thursday for a clue on possible rates hike decision and balance sheet normalization.