By Gwynn Guilford

Supplier prices rose in August at the fastest monthly rate in more than a year due to surging energy costs.

The producer-price index, which generally reflects supply conditions across the economy, increased 0.7% in August from the prior month, the Labor Department said Thursday. Energy prices soared 10.5% in August from July. Prices for gasoline, diesel fuel, jet fuel and home heating oil all leapt last month.

Saudi Arabia's decision to extend cuts to its crude-oil output until the end of the year could keep gasoline and related prices elevated, according to the International Energy Agency.

PPI rose an upwardly revised 0.4% in July.

A less volatile core measure-which excludes food, energy and supplier margins-climbed a milder 0.3% in August from a month earlier, the same as July's revised reading. The pace of increase in those two months was the fastest since February. Excluding only energy, PPI advanced 0.1% on the month in August.

From a year earlier, overall producer prices advanced a still subdued 1.6% and the core measure increased 3%.

Other recent inflation readings have Fed officials on course to hold interest rates steady at their meeting next week without resolving a bigger debate over whether they will need to raise them again this year to slow the economy and maintain recent progress on inflation.

Consumer prices rose 0.6% in August from the prior month, a faster pace than in July, driven by a jump in gasoline prices. Core price gains, which exclude volatile food and energy, have been more moderate in recent months.

The PPI measures what suppliers are charging businesses and other customers, capturing the costs that producers are facing combined with the pricing power they command-dynamics that feed into prices that consumers pay months later.

Services prices rose 0.2% in August, driven by a gain in transportation and warehousing costs. Goods prices, excluding food and energy, ticked up 0.1% on the month, the first increase since May.

Food prices declined 0.5% last month, pulled down in part by a drop in vegetable prices. Margins for wholesalers and retailers decreased 0.3%.

Write to Gwynn Guilford at gwynn.guilford@wsj.com


(END) Dow Jones Newswires

09-14-23 0936ET