US producer inflation rises to 5.4% in August

US producer inflation rose to 5.4% in August, Labor Department data showed Thursday, as energy costs climbed and diesel prices jumped.

The Producer Price Index accelerated from a 4.8% annual rise in July. The August figure was above the 5.3% consensus forecast published by MarketWatch. On a monthly basis, producer prices rose 0.4%, in line with MarketWatch's published analyst expectations.

Energy costs increased 4.2% over the month. The Labor Department said diesel fuel costs rose 24.1%, while gasoline, jet fuel and home heating oil also became more expensive.

AAA said the US national average diesel price reached $5.98 per gallon this week, compared with $3.71 a year earlier. Higher diesel costs affect road hauling, agriculture and the fall harvest season.

The figures came as the Federal Reserve prepared to meet next week. High inflation could push policymakers towards raising rates, and CME Group's FedWatch tool put the likelihood of a 25-basis-point increase at nearly 70%.

Nationwide senior economist Ben Ayers said it was likely to be a close call whether the Federal Open Market Committee raises rates next week. He said headline producer prices were pushed higher mainly by diesel fuel costs, while the Iran war and supply chain disruption were also adding pressure to goods costs beyond energy and food.

The yield on the 30-year Treasury bond rose to 5.35% Thursday, its highest level since 2007. Investors were also awaiting Friday's Consumer Price Index report for a wider view of US inflation.