US wholesale prices rise 0.3% in August as food costs drop

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By The Associated Press

WASHINGTON (AP) — U.S. wholesale prices rose 0.3% in August, just half the July gain, as food and energy prices decline.

The Labor Department said Thursday that the August advance in the producer price index — which measures inflation before it reaches consumers — followed a 0.6% surge in July which was the biggest monthly gain since October 2018.

Helping to moderate wholesale prices in August was a 0.4% drop in food costs, the third straight decline after a big jump in May caused by supply bottlenecks related to coronavirus cases at meat packing plants. Energy costs edged down 0.1% in August after sizable gains in the previous three months.

The moderation in wholesale prices in August was an indication that inflation is remaining at low levels which will allow the Federal Reserve to keep its benchmark policy rate low for the foreseeable future.