In short
Rubbish Talk rates ABC News' claim that wholesale prices show "stubborn inflation" a 3/10 because the BLS's own August PPI release shows the monthly increase landed exactly in line with Wall Street's forecast, with the "stubborn" narrative resting mostly on an energy-driven annual jump rather than broad, accelerating underlying pressure.
The Verdict
Lightly altered. The headline's framing is broadly defensible, the annual PPI rate did jump from 4.7% to 5.4%, but "stubborn inflation" glosses over the fact that the monthly print matched consensus exactly and was driven overwhelmingly by an energy spike, not a broad-based acceleration.
What actually happened
The Bureau of Labor Statistics reported that the Producer Price Index for final demand moved up 0.4 percent in August, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. On an annual basis, the index for final demand increased 5.4 percent for the 12 months ended in August. Core prices, which exclude food and energy, told a more muted story.
Key facts
- Headline PPI: +0.4% MoM in August, which was expected to rise 0.4% in August, according to the Dow Jones consensus forecast… the producer price index rose 0.4%, in line with expectations.
- Annual PPI hit 5.4%, or 0.1 percentage point higher than the estimate, with energy prices a major factor, up from 4.7% in July.
- July's flat reading was itself revised up: PPI rose 0.1% in July, a slight upward revision from the original estimate of no change.
- Core PPI rose only 0.2% MoM, slightly softer than the forecast, and matched the prior month's pace, not an acceleration.
- Energy did the heavy lifting: over three-fourths of the broad-based rise can be attributed to prices for final demand energy, which moved up 4.2 percent, with over a third of the August increase in the index for final demand goods… traced to prices for diesel fuel, which jumped 24.1 percent.
What to watch for
Watch whether September's PPI (out October 15) shows core inflation actually accelerating on a monthly basis, that's the real test of "stubborn" versus an energy-shock blip. Also watch for revisions to August's figures next month, since July was already quietly bumped up from "unchanged" to +0.1%. Finally, this data feeds the Fed's preferred inflation gauge due September 30, so the framing here will likely be recycled ahead of that release.
