WASHINGTON (AP) – The prices charged by U.S. manufacturers, farmers and other producers were unchanged in August, the latest evidence that inflation is tame.
The Labor Department said Friday the producer price index, which measures price changes before they reach the consumer, was flat after a 0.2 percent increase in July. Excluding the volatile food and energy categories, core prices rose 0.3 percent last month.
In the past year, wholesale prices have actually fallen 0.8 percent, the seventh straight 12-month decline. Core prices have risen just 0.9 percent during that time.
With oil and gas prices falling and most other costs little changed, American consumers are enjoying mild inflation. Yet tepid price increases pose a dilemma for the Federal Reserve. It wants to see inflation closer to its 2 percent target before raising interest rates, potentially as soon as its meeting next week.
The Fed targets 2 percent inflation as a cushion against falling prices, or deflation, which can drag down wages and is hard to counteract.