Producer Inflation Jumps to 5.4%, Fuels Fed Hike Bets

U.S. producer prices rose 5.4% year-over-year in August, versus the 5.3% rate economists expected and accelerating from July’s 4.8% reading, according to Labor Department data released Thursday.

On a monthly basis, the headline producer price index (PPI) accelerated from July’s 0.1% to 0.4%, against a 0.3% consensus.

Core PPI, which strips out food and energy, rose 0.2% on the month against 0.3% expected, lifting the annual rate to 4.6% from 4.3%.

PPI excluding food, energy and trade services came in at 0.3% month-over-month and 4.7% year-over-year, from 0.4% and 4.7% previously.

Prior to the PPI report, Fed futures had priced a 62% chance of a rate hike at the Fed’s next week meeting.

This is a developing story…

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