The Producer Price Index (PPI), which measures inflation on the wholesale level, rose 0.2% in August, with the annual reading falling from a downwardly revised 2.1% to 1.7%. Core PPI, which strips out volatile food and energy prices, rose 0.3% for the month and the year-over-year reading ticked higher from 2.3% to 2.4%.
What’s the bottom line? While the hotter than expected monthly readings did cause the Bond market to react negatively when the data was released last Thursday, producer inflation remains tame. August’s 1.7% year-over-year reading is well below the peak of 11.7% seen in 2022 and keeps the Fed on track to begin cutting rates this week.