Inflation Creeping Higher

The Producer Price Index for finished goods exceeded forecasts in August and grew an annualized 4.8 percent, the largest advance since March.

Headline growth was led by energy prices, which rose a whopping 29.7 percent. This is the the first increase in five months. The core index slowed in August up just only 0.7 percent after climbing 4.2 percent in July. Consequently, year-over-year change in the core eased 0.2 percentage point to 1.3 percent.

Despite the slowed growth in the core, the trend in inflation continues to creep higher. The Cleveland Fed has the best take:

[The PPI data, in spite of the slowed core rate] is still consistent with the series pattern of a slow, steady up-trend since October 2009’s trough of 0.7 percent. Upstream, both core intermediate and core crude goods’ prices reversed course in August, with core intermediate prices inching up 0.7 percent after two months of decline and core crude goods jumping 61.1 percent following three straight drops.