WASHINGTON (Reuters) - U.S. producer prices rose in August as energy costs rebounded, but underlying inflation remained tame.
The Labor Department said on Friday its seasonally adjusted producer price index increased 0.3 percent last month. Wholesale prices had been flat in July.
A Reuters survey of economists had forecast prices received by the nation’s farms, factories and refineries rising 0.2 percent in August.
In the 12 months through August, wholesale prices rose 1.4 percent after advancing 2.1 percent in July. August’s increase was the smallest since April.
Wholesale prices excluding volatile food and energy costs were unchanged after rising for nine straight months. In the 12 months through August, the so-called core PPI increased 1.1 percent after rising 1.2 percent in July.
August’s increase was the smallest since June 2010.
Although price pressures remain benign against the backdrop of a sluggish jobs market, that is unlikely to stop the Federal Reserve from reducing the $85 billion in Treasury and mortgage bonds it is buying each month to keep interest rates low.
Inflation is expected to gradually rise as the economy regains some momentum. Economists expect an announcement on the future of the program could come at the end of next Tuesday and Wednesday’s policy meeting.
In August, wholesale gasoline prices bounced back by 2.6 percent from a 0.8 percent drop the prior month. That helped to push up overall energy prices, which rose 0.8 percent.
Energy, which had dropped 0.2 percent in July, accounted for nearly two-third of the increase in wholesale prices last month.
Producer prices were also lifted by a 0.6 percent gain in food prices. Food prices were boosted by jumps in the cost of processed poultry, fresh and dry vegetables, as well as soft drinks.
Away from food and gasoline, passenger car prices fell 0.5 percent, while light truck prices dropped 0.3 percent. The two make up about 20 percent of the core PPI.
Reporting by Lucia Mutikani; Editing by Andrea Ricci