The Age of Inflation

Monthly percent change in producer prices, 1998-2008. Souce: BLS

Producer Prices Fall in August

After rising 1.2 percent in July, today the Bureau of Labor Statistics (BLS) announced that the Producer Price Index for August has fallen by 0.9%. Here is the BLS news release. This drop largely reflects a fall in energy costs, as the cost of energy producers faced in August dropped 4.6%. In all, these numbers represent a 9.6% annual inflation rate for producers. Here are some key statements from the report:

The index for finished energy goods declined 4.6 percent in August following a 3.1-percent advance in July. Prices for liquefied petroleum gas dropped 19.5 percent in August after rising 10.8 percent a month earlier. The indexes for residential natural gas, home heating oil, diesel fuel, and kerosene also turned down following increases in July. Gasoline prices fell more in August than they had in the prior month, while the index for residential electric power rose less than it had in July. Conversely, slightly counteracting the overall downturn in finished energy goods, prices for finished lubricants advanced 8.6 percent in August after moving up 5.4 percent in the preceding month.

The index for finished goods other than foods and energy moved up 0.2 percent in August following a 0.7-percent jump in July. Prices for pharmaceutical preparations advanced 0.4 percent in August after rising 0.7 percent in the prior month. The indexes for light motor trucks, passenger cars, heavy motor trucks, and for medical, surgical, and personal aid devices fell after advancing in July. Prices for turbines and turbine generator sets were unchanged in August following a surge in the previous month. By contrast, the civilian aircraft index climbed 0.7 percent after rising 0.3 percent in July. Prices for pet food and for industrial trucks and tractors also moved up more than they had a month earlier.

Consumer price data for August are scheduled to be released September 16.