Producer Prices Rise Less Than Expected in August
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Right 50%
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What happened
The U.S. Bureau of Labor Statistics reported Thursday that the producer price index for final demand, a measure of prices received by domestic producers for goods and services sold to end users, rose a seasonally adjusted 0.4 percent in August, matching the consensus forecast, after an upwardly revised 0.1 percent increase in July. Compared with a year earlier, the index was up 5.4 percent. Excluding food and energy, the core index rose 0.2 percent, below the 0.3 percent increase economists had forecast. Energy prices increased 4.2 percent for the month, led by a 24.1 percent jump in diesel fuel, while goods prices rose 1.1 percent and services prices rose 0.1 percent. The figures were released less than a week before a Federal Reserve interest-rate decision.
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Omitted — what each side leaves out
Unpacked
The August increase can look like broad wholesale inflation unless a reader sees how tightly it was concentrated in fuel. Right-leaning coverage states that energy accounted for more than three-fourths of the rise in goods prices. It further reports that services prices were unchanged after transportation and warehousing are removed. Left-leaning coverage notes that energy and goods drove most of the move, but does not give those shares or the flat services reading.
Headlines pull opposite ways on the same print. Left-leaning coverage leads with wholesale prices rising "as expected." Right-leaning coverage leads with core prices coming in below forecast. The core figure appears in both accounts, but only one headline treats the miss as the story.
How much of headline producer-price inflation is energy, and what remains when that is taken out?
Bottom line
CNBC reported August producer prices as a forecast match and never said energy drove more than three-fourths of the goods increase.
The receipts — 6 facts one side's coverage lacks
- Energy accounted for more than three-fourths of the August rise in goods prices
- Excluding transportation and warehousing, services prices were flat in August
- Core PPI is up 4.6 percent from a year earlier
- The producer price index is not an index of wholesale prices
- Core PPI slowed from a revised 0.3 percent increase in July
- Much of this year's persistent inflation has been attributed to the lingering impact from tariffs
The Left View
CNBC framed the report as leaving inflation risks intact ahead of the Federal Reserve's meeting, noting that the annual reading remains "still well above the Fed's 2% inflation target" and quoting Fwdbonds chief economist Chris Rupkey that it "does nothing to turn down the warnings about the inflation threats the economy faces, especially if you are an inflation hawk with an itchy trigger finger at the Federal Reserve." The outlet attributed most of the monthly move to energy and goods, cited "further signs of pipeline pressures," and reported that stock-index futures turned negative as crude oil topped $100 a barrel and Treasury yields moved sharply higher. It said traders slightly increased bets on a quarter-point rate hike to near 66 percent after the Fed held rates through 2026, that Chair Kevin Warsh has said "action may be needed" while other officials urge patience, and that persistent inflation this year has been attributed to "the lingering impact from tariffs as well as the war in the Middle East."
The Right View
Breitbart led with core producer prices rising less than expected, describing a slowdown from the prior month and a reading below economists' forecast. It attributed the headline increase to higher fuel prices "since the start of the war with Iran," detailing large month-to-month and year-over-year gains in diesel, gasoline, and home heating oil, while pointing to "some good news on the energy front" as residential electricity and natural gas prices fell. The outlet said more than three-fourths of the goods-price rise came from energy and more than a third from diesel alone, and that services prices excluding transportation and warehousing were flat. It also highlighted sharp yearly increases in energy purchased by government and in export energy prices.
Our Take (balanced)
The left-leaning coverage's strongest argument is that even an in-line headline print leaves inflation far from the Fed's target and, in Rupkey's words, "does nothing to turn down the warnings about the inflation threats," given energy-led goods inflation, pipeline pressures, and a rate decision days away. The right-leaning coverage's strongest argument is that core prices rose less than expected and that services were flat once transportation and warehousing are stripped out, concentrating the increase in war-related energy rather than a broad acceleration. The central unresolved tension is whether the cooler core reading and flat non-transport services indicate that underlying producer inflation is easing, or whether energy-driven goods prices and pipeline pressures mean the inflation threat remains intact.
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