In August 2023, the U.S. Producer Price Index (PPI) increased by 0.7%. The significant rise was mainly attributed to a 2.0% jump in final demand goods, primarily fueled by a substantial 20.0% increase in gasoline prices.
Highlights
PPI Overview
The U.S. Bureau of Labor Statistics recently released the Producer Price Index (PPI) data for August 2023, showing a notable increase following a moderate rise in July. Final demand goods experienced a significant surge.
Producer Price Dynamics
In August, the seasonally adjusted PPI for final demand rose by 0.7%, surpassing July's 0.4% increase. This is the largest jump since June 2022. The unadjusted 12-month rate ending in August showed a 1.6% growth. The Core PPI met expectations, rising by 0.2%.
Goods vs. Services
The majority (80%) of the PPI increase can be attributed to a 2.0% surge in the index for final demand goods, driven by a significant increase in energy prices. In contrast, final demand services saw more modest growth. Prices for final demand goods excluding food and energy rose slightly, while prices for final demand foods decreased.
Key Influencers
The rise in the index for final demand goods in August was primarily driven by a 20.0% surge in gasoline prices. Other contributing factors included diesel fuel, jet fuel, beverages, and iron and steel scrap. On the other hand, prices for fresh and dry vegetables significantly declined. In the service segment, residential real estate services experienced a boost, while margins for chemicals and allied products wholesaling decreased.
Retail Sales Highlights
In August 2023, retail sales reached $697.6 billion, increasing by 0.6% compared to July. Gasoline stations saw a decline of 10.3% compared to the previous year, while food services experienced an 8.5% surge since August 2022.
Retail Sales Overview
The retail and food services sectors in the U.S. showed positive growth in August 2023, with a 0.6% increase compared to July, reaching $697.6 billion. This reflected a 2.5% growth from August 2022. Core Retail Sales exceeded the forecast of 0.4%.
Comparative Growth
From June to August 2023, retail sales showed a 2.2% improvement compared to the same period in 2022. The growth rate for the June to July 2023 interval was revised downward to 0.5% from the initially reported 0.7%.
Retail Sales Insights
Retail trade matched the overall trend, increasing by 0.6% from July 2023 and showing a year-on-year growth of 1.6%. Gasoline stations experienced a significant decline, while food services and drinking establishments showed strong growth.
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