Wholesale inflation mostly cooled last month in latest sign that price pressures are slowing

WASHINGTON (AP) — U.S. wholesale price increases mostly slowed last month, the latest evidence that inflation pressures are cooling enough for the Federal Reserve to begin cutting interest rates next week.

The Labor Department said Thursday that its producer price index — which tracks inflation before it reaches consumers — rose 0.2% from July to August. That was up from an unchanged reading a month earlier. But measured from a year ago, prices were up 1.7% in August, the smallest such rise since February and down from a 2.1% annual increase in July.

Excluding food and energy prices, which tend to fluctuate from month to month, so-called core wholesale prices moved up 0.3% from July and have risen 2.3% from August 2023.

Taken as a whole, last month’s wholesale price figures suggest that inflation is moving back toward the Fed’s 2% target level. After peaking at a four-decade high in mid-2022, the prices of gas, groceries and autos are either falling or rising at slower pre-pandemic rates. On Wednesday, the government reported that its main inflation measure, the consumer price index, rose just 2.5% in August from a year earlier, the mildest 12-month increase in three years.

The latest inflation figures follow a presidential debate Tuesday night in which former President Donald Trump attacked Vice President Kamala Harris for the price spikes that began a few months after the Biden-Harris administration took office, when global supply chains seized up and caused severe shortages of parts and labor.

Christopher Rugaber, The Associated Press