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The
unchanged reading in the producer price index last month
followed a 0.2 percent gain in July, the Labor Department said
on Friday. The drag on producer prices from lower crude oil
prices and a strong dollar was offset by an increase in profit
margins for apparel, footwear and accessories retailing.
In the 12 months through August, the PPI fell 0.8 percent after
a similar decline in July. It was the seventh straight 12-month
decrease in the index.
Tame inflation despite a rapidly tightening labor market poses a
dilemma for Fed officials who are contemplating raising rates
for the first time in nearly a decade.
The U.S. central bank's policy-setting committee meets on Sept.
16-17. The likelihood of a lift-off in the Fed's benchmark
overnight interest rate has been diminished by recent financial
market volatility, which was sparked by concerns over China's
economy.
Economists polled by Reuters had forecast the PPI dipping 0.1
percent last month and falling 0.9 percent from a year ago.
Producer inflation is likely to remain muted in the near term
after a report on Thursday showed import prices fell 1.8 percent
in August, the largest drop since January.
Wholesale food prices rose 0.3 percent in August as the impact
of an avian flu outbreak early this year lingers. Food prices
slipped 0.1 percent in July. Wholesale chicken egg prices rose
23.2 percent after falling 24.2 percent in July.
The volatile trade services component, which mostly reflects
profit margins at retailers and wholesalers, shot up 0.9 percent
in August after rising 0.4 percent in the prior month. Almost
half of the increase in August was attributed to a 7.0 percent
surge in margins for apparel, footwear and accessories
retailing.
A key measure of underlying producer price pressures that
excludes food, energy and trade services edged up 0.1 percent in
August after rising 0.2 percent in July.
The dollar's 17.5 percent rise against the currencies of the
United States' main trading partners since June 2014 is
restraining gains in the so-called core PPI.
Core PPI was up 0.7 percent in the 12 months through August.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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