U.S. producer prices rose again in August, with a sharp increase in energy costs pushing wholesale inflation back above 5%.
The August Producer Price Index report, released by the Bureau of Labor Statistics on September 10, shows that prices for final demand increased 0.4% from July. Producer prices were 5.4% higher than a year earlier.
The monthly increase matched the 0.4% economists had expected. The annual rate came in slightly above the 5.3% forecast reported before the release. July was also revised, with final demand prices now shown rising 0.1% for the month and 4.8% from a year earlier.
August 2026 PPI Numbers
| PPI measure | August monthly change | 12-month change |
|---|---|---|
| Final demand | +0.4% | +5.4% |
| Final demand excluding food and energy | +0.2% | +4.6% |
| Final demand excluding food, energy and trade services | +0.3% | +4.7% |
| Final demand goods | +1.1% | +7.7% |
| Final demand services | +0.1% | +4.5% |
The figures come from the BLS detailed August PPI tables. They show that the headline increase was heavily concentrated in goods, especially energy, rather than a large increase across every part of the producer economy.
Energy Was the Main Reason PPI Moved Higher
Prices for final demand goods jumped 1.1% in August after declining in both June and July. More than three-quarters of that increase came from energy, according to BLS.
Final demand energy prices rose 4.2% in a single month and were 24.4% higher than in August 2025.
Diesel Fuel Jumped 24.1% in One Month
Diesel was the largest individual contributor to the increase in goods prices. BLS reported that diesel fuel prices increased 24.1% in August and accounted for more than one-third of the monthly increase in final demand goods.
Gasoline, jet fuel and home heating oil prices also increased. Residential electricity moved in the other direction, falling 0.5%.
The official Department of Labor PPI release provides the full breakdown of those changes.
| Selected August price movement | Monthly change |
|---|---|
| Final demand energy | +4.2% |
| Diesel fuel | +24.1% |
| Final demand goods excluding food and energy | +0.4% |
| Final demand food | +0.1% |
| Residential electric power | -0.5% |
Energy costs have become an important part of the inflation story again in 2026. Higher oil and fuel prices affect more than gas stations. Diesel is a major cost for trucking, agriculture, construction and freight, which means a sustained increase can work its way through supply chains.
Services Inflation Was Much Quieter
Producer prices for services increased only 0.1% in August. That was the third consecutive monthly increase, but the details were mixed.
Transportation and warehousing services rose 2.3%. Truck freight transportation increased 2.0%, and airline passenger services also moved higher.
Trade services fell 0.2%. BLS measures many trade prices through margins received by wholesalers and retailers rather than the shelf price of the product itself.
Prices for services excluding trade, transportation and warehousing were unchanged in August.
Core PPI Also Increased
Energy explains a large part of the August headline increase, but underlying producer inflation did not disappear.
Final demand excluding food and energy rose 0.2% during August and 4.6% over the past year. Another measure watched closely by economists removes food, energy and trade services. That index increased 0.3% for the month and 4.7% over 12 months.
The distinction is useful because trade margins can move sharply from month to month. Removing food, energy and trade services gives another view of price pressure underneath the most volatile parts of the report.
August Reversed Some of The Summer Cooling
The latest report looks stronger when compared with June and July.
| Month | Monthly PPI change | 12-month PPI change |
|---|---|---|
| June 2026 | -0.1% | 5.6% |
| July 2026 | +0.1% | 4.8% |
| August 2026 | +0.4% | 5.4% |
BLS notes that April through July figures were revised after late reports and corrections from survey respondents. The latest official numbers should therefore be used when comparing August with previous months.
CNN examined the increase in wholesale inflation as markets waited for the next consumer inflation report.
What Does the PPI Actually Measure?
PPI is not a direct measure of prices households pay at stores.
According to the BLS PPI program, the index measures changes in selling prices received by domestic producers for their output. It covers goods, many services and construction.
CPI looks at prices from the consumer side. PPI looks at prices from the producer or seller side.
A producer price increase can eventually reach consumers, but there is no automatic one-for-one relationship. A company can absorb some higher costs through lower margins, find cheaper inputs, change suppliers or pass some of the increase to customers.
Why is the August PPI so Important for the Federal Reserve?
The August report arrives less than a week before the next Federal Reserve interest rate decision.
The Federal Reserve calendar shows that the next FOMC meeting runs September 15 and 16, with the policy decision scheduled for September 16.
A 5.4% annual increase in producer prices gives policymakers another sign that inflation pressure remains elevated. Core measures are also running above levels consistent with stable 2% consumer inflation, although PPI is not the inflation measure targeted directly by the Fed.
We recently looked at the other major inflation measure in our report on July PCE inflation. Headline PCE inflation remained at 3.7% in July, while core PCE stood at 3.3%.
The CPI Report Comes Next
Producer inflation is only the first major inflation release this week.
The BLS release calendar shows that the August Consumer Price Index is scheduled for Friday, September 11 at 8:30 a.m. Eastern Time.
July CPI increased 0.1% for the month and 3.4% over the previous 12 months. Core CPI rose 0.2% in July and 2.5% over the year, according to the latest available BLS consumer inflation data.
Friday will show more directly how much inflation households faced in August. A hot CPI report following the rise in producer prices would give the Fed stronger evidence that inflation accelerated again. A softer CPI result would point to a larger gap between costs faced by producers and prices ultimately paid by consumers.
Bottom line
The August PPI report was not a major surprise on the monthly headline number. Producer prices rose 0.4%, exactly matching the expected monthly increase.
The details were less comfortable. Annual producer inflation climbed to 5.4%, goods prices rose 1.1%, energy jumped 4.2% and diesel fuel increased 24.1% in one month. Even after food and energy were removed, producer prices were still 4.6% higher than a year earlier.
Services were much calmer, rising only 0.1%, which shows that August was largely an energy and goods story. The next important number arrives on September 11, when BLS releases August CPI. Together, the PPI and CPI reports will give the Federal Reserve its final major inflation readings before the September 16 policy decision.
