The Producer Price Index year-over-year inflation declined from 3.3 % to 2.8 %.

Analyst Opinion of Producer Prices

The Producer Price Index declined year-over-year. Food prices did moderate – but energy inflation rose. The decline in inflation was more than expected. Here is what the BLS said in part:

The Producer Price Index for final demand declined 0.1 percent in August, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices were unchanged in July and increased 0.3 percent in June. (See table A.) On an unadjusted basis, the final demand index rose 2.8 percent for the 12 months ended in August. In August, the decline in the final demand index can be attributed to a 0.1-percent decrease in prices for final demand services. The index for final demand goods was unchanged. The index for final demand less foods, energy, and trade services edged up 0.1 percent in August after advancing 0.3 percent in both July and June. For the 12 months ended in August, prices for final demand less foods, energy, and trade services rose 2.9 percent.

The PPI represents inflation pressure (or lack thereof) that migrates into consumer price.

The market had been expecting (from Nasdaq / Econoday):

month over month change Consensus Range Consensus Actual PPI-Final Demand (PPI-FD) -0.1 % to 0.3 % +0.2 % -0.1 % PPI-FD less food & energy (core PPI) 0.2 % to 0.3 % +0.2 % -0.1 % PPI-FD less food, energy & trade services 0.2 % to 0.3 % +0.2 % +0.1 %

The producer price inflation breakdown:

category month-over-month change year-over-year change final demand goods +0.0 %   final demand services -0.1%   total final demand -0.1 % +2.8 % processed goods for intermediate demand +0.0 % +6.3 % unprocessed goods for intermediate demand -5.8 % +2.9 % services for intermediate demand +0.1 % +2.9 %