Wholesale prices in the US fell for the first time in 18 months in August, according to new data released on Wednesday that added to the pressure on the dollar.
The headline producer price index — a key measure of industrial inflation — fell 0.1 per cent on a month-over-month basis in last month, according to data from the labour department. It was the first fall since February 2017, and missed expectations in a Reuters poll for a 0.2 per cent uptick.
The year on year rate slowed to 2.8 per cent from 3.3 per cent, compared to the 3.2 per cent the market had forecast.
Stripping out food and energy, two volatile items, the gauge was still down 0.1 per cent month-on-month, and slowed to 2.3 per cent year-on-year.
Producer prices have risen solidly this year, largely driven by a rise in fuel and transportation costs. The steady rise in inflation and the tighter labour market have emboldened policymakers to push ahead with interest rate rises this year.
Last month’s unexpected fall in prices is in part attributed to falling prices for transportation and warehousing services, according to the statement from the labour department.
The dollar index, which has been largely unchanged this morning, fell 0.1 per cent after the data came out.