August PPI Accelerates to +5.4% YoY as Iran War Drives Energy Costs; Diesel Surges 24.1%

The Bureau of Labor Statistics' Producer Price Index for final demand rose 0.4% (seasonally adjusted) in August, released September 10, lifting the unadjusted 12-month rate to 5.4% — an acceleration from July's cooler print. More than three-quarters of the broad-based monthly rise was attributable to final-demand energy prices, which jumped 4.2%; within that, diesel fuel surged 24.1%, accounting for over a third of the increase in final-demand goods, as the unresolved US-Iran Gulf conflict kept a war-risk premium in crude and refined products. Final-demand goods prices overall advanced 1.1% while services rose a more modest 0.1%. The hotter wholesale print reinforced the case that the Gulf conflict's oil shock is now feeding directly into the domestic inflation pipeline just six days before the September 15-16 FOMC meeting, compounding pressure on a Fed already leaning hawkish after the August jobs blowout.