US producer prices unchanged last month as cheaper gas offset pricier food

EnergyAssociated Press

The prices charged by manufacturers, farmers and other producers were unchanged in August, the latest evidence that inflation is tame.

The Labor Department says the producer price index, which measures price changes before they reach the consumer, was flat after a 0.2 percent increase in July. Excluding the volatile food and energy categories, core prices rose 0.3 percent last month.

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In the past year, wholesale prices have actually fallen 0.8 percent, the same as in July and the seventh straight 12-month decline. Core prices have risen just 0.9 percent during that time.

Very low inflation poses a dilemma for the Federal Reserve. It wants to see price increases closer to its 2 percent target before raising interest rates, potentially as soon as its meeting next week.