Unexpected decline in U.S. PPI in August strengthens case for Fed rate cut

The U.S. producer price index unexpectedly fell in August, the first decline in four months, further strengthening the case for the Federal Reserve to cut interest rates. According to a report released by the Bureau of Labor Statistics on Wednesday, the Producer Price Index (PPI) fell 0.1% month-over-month, with July's data revised downward. Year-over-year, the PPI rose 2.6%. The report showed that despite Trump's tariffs pushing up costs, businesses avoided significant price increases last month. While the decline followed a sharp increase in July, many businesses are concerned that significant price increases could scare off customers amid ongoing economic uncertainty. Prices for goods excluding food and energy rose 0.3%, while the cost of services fell 0.2%. In the services sector, profit margins for wholesalers and retailers fell 1.7%, the largest drop in over a year. Profit margins have fluctuated significantly from month to month this year, highlighting the uncertainty surrounding the impact of trade policy on prices and demand. (Jinshi)