Durrant Pate/Contributor

Inflation climbed slightly last month in the United States, as producer prices contracted by 0.1 per cent

The US Bureau of Labour Statistics announced that the Consumer Price Index for All Urban Consumers (CPI-U) rose by 0.4 per cent on a seasonally adjusted basis in August 2025, following a 0.2 per cent increase in July.  Over the past 12 months, the all-items index increased by 2.9 per cent.

The shelter index rose by 0.4 per cent in August, contributing significantly to the overall monthly increase. The food index increased by 0.5 per cent, as the food at home index rose by 0.6% while the food away from home index increased by 0.3 per cent. 

Higher fuel prices spur upward push

The energy index rose by 0.7 per cent, driven by a 1.9 per cent increase in the gasoline index. Excluding food and energy, the all-items index increased by 0.3 per cent in August, unchanged from July. Notable increases were observed in airline fares, used cars and trucks, apparel, and new vehicles.

The indexes for medical care, recreation, and communication were among the few major indexes that decreased in August. Over the last 12 months, the all-items index rose by 2.9 per cent, up from the 2.7 per cent increase recorded for the 12 months ending in July. 

The index for all items, less food and energy, increased by 3.1 per cent over the past year. The energy index increased by 0.2 per cent, while the food index rose by 3.2 per cent over the same period.

Details on America PPI

The Producer Price Index (PPI) for final demand in the US edged down 0.1 per cent in August on a seasonally adjusted basis. This follows a 0.7 per cent increase in July and a 0.1 per cent rise in June. 

On an unadjusted basis, the index for final demand advanced 2.6 per cent over the 12 months ended August 2025. In August, a 0.2 per cent decline in prices for final demand services accounted for the overall decrease, while prices for final demand goods inched up 0.1 per cent.

Excluding foods, energy, and trade services, the index for final demand rose 0.3 per cent in August, marking the fourth consecutive monthly increase. Over the past 12 months, this index has advanced 2.8 per cent, the largest 12-month increase since March 2025.

Final demand goods
The index for final demand goods rose 0.1 per cent in August, continuing a four-month streak of increases. Leading the gain was a 0.3 per cent rise in prices for goods excluding foods and energy. Food prices edged up 0.1 per cent, while energy prices declined 0.4 per cent.

Notable contributors to the increase included a 2.3 per cent rise in prices for tobacco products, along with gains in beef and veal, processed poultry, printed circuit assemblies and related electronics, and electric power. These were partially offset by a 1.8 per cent decline in utility natural gas prices, as well as decreases in prices for fresh and dry vegetables, chicken eggs, and copper base scrap.

Final demand services
The index for final demand services fell 0.2 per cent in August, the largest monthly decline since April. This was primarily driven by a 1.7 per cent drop in margins for final demand trade services. Prices for services excluding trade, transportation, and warehousing rose 0.3 per cent, while transportation and warehousing services increased 0.9 per cent.

Key contributors to the decline included a 3.9 per cent drop in margins for machinery and vehicle wholesaling, along with decreases in professional and commercial equipment wholesaling, chemicals and allied products wholesaling, furniture retailing, food and alcohol retailing, and data processing services. 

Offsetting these declines were gains in portfolio management (up 2.0 per cent), truck transportation of freight, and apparel wholesaling.