Inflation at the wholesale level jumped 8.7% in August from a year earlier, a slowdown from July yet still a painfully high level that suggests prices will keep spiking for months to come.
Wednesday's report from the Labor Department also showed that on a month-to-month basis, the producer price index which measures inflation before it reaches consumers declined 0.1% from July to August, the second straight monthly decline.
Yet the better readings mostly reflect plunging gas prices and don't necessarily point to a broader slowdown in inflation. A measure that excludes the volatile food and energy categories so-called core prices rose 0.4% from July to August and 7.3% in August compared with a year ago.
The worse-than-expected consumer price spikes sent the stock market tumbling to its worst day in more than two years on fears that the Federal Reserve will turn even more aggressive in raising interest rates to fight inflation.
Wednesday's producer price data captures inflation at an earlier stage of production and can often signal where consumer prices are headed. It also feeds into the Feds preferred measure of inflation, which is called the personal consumption expenditures price index.
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