Wholesale prices continued to move higher in the run-up to Hurricane Katrina, while the trade deficit unexpectedly narrowed in July, government reports showed Tuesday.
The Labor Department's producer price index rose 0.6% in August from July, reflecting higher energy costs amid a worldwide oil crunch. Excluding food and energy prices, the core PPI was unchanged.
Economists had been expecting the PPI to rise 0.7% last month and core PPI to rise 0.1%. Tuesday's gains follow a 1% jump in July's headline PPI and a 0.4% gain in July's core number.
Within the August report, energy prices rose 3.7%, down from a 4.4% growth rate in July, while prices for passenger cars fell 1.3%.
In a separate report from the Commerce Department, the U.S. trade deficit fell to $57.94 billion in July from $59.49 billion in June. The Wall Street consensus for the July number was $59.8 billion.