US wholesale prices spiked unexpectedly in August, driven by surging energy demand, according to government reports.
The Producer Price Index (PPI) saw a 0.7 percent rise, surpassing economist forecasts and marking an increase from the previous month's revised 0.4 percent.
Rising energy costs also fueled consumer inflation, heightening the pressure on the Federal Reserve's rate-setting committee, the Federal Open Market Committee (FOMC), which meets next week.
Despite 11 interest rate hikes in the last 18 months to combat inflation, it remains above the Fed's target of two percent, largely due to recent energy-driven increases.
Analysts anticipate the FOMC will maintain current rates, with the future path contingent on incoming data.
A significant portion of the PPI increase came from a 2.0 percent rise in final demand goods, notably a 10.5 percent surge in energy costs. Final demand services saw a more modest 0.2 percent increase, driven by a 1.1 percent rise in residential real estate services. The core PPI, excluding volatile components, rose by 0.3 percent, aligning with recent trends.
