Wholesale prices moved higher last month in latest sign of stubborn inflation

Wholesale inflation rose in August as higher oil and gas prices due to the Iran conflict keep costs elevated, according to the Labor Department’s producer price index.

The index showed a 5.4% increase in August compared to a year ago, up from 4.7% in July. On a monthly basis, wholesale prices increased 0.4% from July to August, after a 0.1% rise in the previous month.

Oil prices hit $100 a barrel this week due to renewed fighting in the Middle East, and President Trump has escalated a trade war with Canada, which could push up costs further.

While inflation has shown signs of easing recently, it remains high and is causing frustration for consumers dealing with the rising prices of gas, groceries, clothing and other essentials.

The figures are particularly important as they may influence the Federal Reserve's decision to raise short-term interest rates at a policy meeting next week. The producer price index data, released on Thursday, will also help calculate the Fed’s preferred inflation measure, which will be published on September 30.