WASHINGTON – Wholesale inflation accelerated in August after easing earlier in the summer, as higher oil and gasoline prices tied to the Iran war continued to keep business costs under pressure.
The Labor Department said Thursday that its producer price index, a measure of inflation before it reaches consumers, climbed 5.4% in August from a year earlier. That was up from 4.7% in July. The annual pace of wholesale inflation reached its 2024 high of 5.9% in May, after the Iran conflict drove energy prices higher. From July to August, wholesale prices rose 0.4%, following a 0.1% monthly increase in July.
While inflation has cooled in some areas over the past several months, prices remain painfully high for many households facing steeper costs for gas, groceries, clothing and other necessities. Global oil prices moved above $100 a barrel this week amid renewed fighting in the Middle East. At the same time, President Donald Trump has escalated a trade dispute with Canada, underscoring the risk that tariffs could add further pressure to prices. The persistence of inflation remains a political challenge for the Trump administration and Republicans campaigning in the midterm elections.
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Stripping out the often volatile food and energy categories, so-called core prices increased 0.2% from July to August, matching the prior month’s gain. On an annual basis, core wholesale prices rose 4.6%, up from 4.2% in July.
The latest report is likely to be examined closely because it could influence whether the Federal Reserve raises its short-term interest rate at next week’s policy meeting. Producer price data is also used in calculating the Fed’s preferred inflation gauge, which is scheduled for release Sept. 30.
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