The US producer price index rose more than expected in August as continued disruptions to the supply chain pushed up production costs.
The producer price index of final demand rose 0.7% month-on-month in august, a record 8.3% year-on-year increase, according to data released by the labor department on Friday. Excluding volatile food and energy, the so-called core PPI rose 0.6 per cent month-on-month and 6.7 per cent from a year earlier.
Economists polled by Bloomberg had a median forecast of 0.6 per cent month-on-month growth in both overall PPI and core data.
From the shortage of raw materials and transport bottlenecks to rising labor costs, the entire production process faces a variety of challenges, pushing up the costs of producers. In recent months, many companies have passed on these additional costs to consumers by raising prices, further exacerbating consumer inflation.
According to the PPI report, commodity prices rose 1 per cent, up 0.6 per cent the previous month, while the cost of services rose 0.7 per cent.
Next week, the US will release a consumer price index report, which expects CPI to rise 0.4 per cent month-on-month and 5.3 per cent year-on-year.
Producer prices, excluding food, energy and trade services, rose 0.3 per cent month-on-month and 6.3 per cent year-on-year. Because the volatile components are excluded, the index is usually favored by economists.
Global producers are raising prices at a time when commodity and shipping costs are soaring. A separate report released earlier this week showed that China's producer price index rose the most in 13 years in August from a year earlier.