U.S., August producer prices 0.1%p ↓…unexpected decline

Core PPI rose 0.3%p

After July's surge followed by a shift to a decline, calls for rate cuts gain strength

The U.S. Producer Price Index (PPI) for August unexpectedly fell 0.1% on a monthly basis. Contrary to economists who had expected a 0.3% increase, it fell.

On the 10th (local time), the U.S. Bureau of Labor Statistics announced that the August PPI fell 0.1% from the previous month. It rose 2.6% year-on-year.

In the previous month it rose 0.7% month-on-month, pushing the annual rate above 3.1%, but it fell again a month later.

The core producer price index excluding food and energy rose 0.3%, recording an annual rate of 2.8%. Service costs fell 0.2%. In the services sector, wholesale and retail margins fell 1.7%, the largest decline in a year.

According to the report, all PPIs for May, June and July have been adjusted since last April.

The report said this suggests companies refrained from raising prices last month despite President Trump's tariff increases.

As U.S. wholesale inflation unexpectedly fell in August for the first time in four months, arguments that the Federal Reserve should cut interest rates gained more strength.

Kim Jeong-a guest reporter kja@hankyung.com