Producer inflation accelerated in August, with wholesale prices hitting a record 8.3% from a year ago

The prices producers get for final demand goods and services jumped in August to their highest annual rate since at least 2010, the Labor Department reported on Friday.

The producer price index rose 0.7% for the month, above the Dow Jones estimate of 0.6% but below the 1% increase in July.

Year over year, the tonnage increased 8.3%, the largest annual increase since records were maintained since November 2010. This follows a 7.8% increase in July, which also set a record.

The data comes amid heightened inflation fears fueled by supply chain issues, a shortage of various consumer and producer goods and increased demand linked to the Covid-19 pandemic. Federal Reserve officials expect inflationary pressures to ease throughout the year, but they have remained stubbornly persistent, with Friday’s figures indicating the trend is likely to continue.

Excluding food, energy and commercial services, final demand prices rose 0.3% for the month, below the Dow Jones estimate of 0.5%. Nonetheless, that left the core PPI up 6.3% from a year ago, also the largest record increase for data dating back to August 2014.

Final demand services increased 0.7% on the month, thanks to a gain of 1.5% in market services, or the margins received by wholesalers and retailers. Transportation and warehousing costs jumped 2.8%.

About a third of the overall increase came from health, beauty and optical products, which jumped 7.8%. Prices for outpatient hospital care held back gains, falling 1.5%.

The prices of final demand goods rose 1% for the month, driven mainly by a 2.9% gain in food, which in turn came from an 8.5% increase in meat prices. . Prices for slaughtered poultry jumped 11%. Prices have fallen for iron, steel and diesel fuel.