HVAC wholesale prices extend months-long climb in August

A figure that tracks U.S. wholesale prices of HVAC equipment in August inched up for the eighth consecutive month, according to the Bureau of Labor Statistics (BLS). 

What’s happening: The BLS on Thursday released August producer price indexes (PPI) for an array of industries, which measure the average change in the selling prices domestic manufacturers receive for their products. 

• An HVAC-specific PPI rose nearly 0.3 percent during the month, compared to the prior, and is up 3.9 percent year-over-year. 
• Compared to August 2021, the index is up 43 percent. 

Zoom out: Because PPI measures wholesale price changes — before they reach consumers — it’s widely seen as a leading indicator of inflation. 

• The overall, economy-wide PPI rose 0.4 percent month-over-month in August, in line with economists’ expectations, putting the figure up 5.4 percent on an annual basis.

Why it matters: Next week, central bankers will release their decision on interest rates.

• According to CNBC, the Federal Reserve is expected to approve a quarter-percentage-point hike of its benchmark interest rate.

What they’re saying: “[Fed] Chairman Kevin Warsh recently emphasized his commitment to getting inflation back to target and said action may be needed,” the outlet wrote. “Others, though, have advocated for a more patient approach and said policymakers should continue to watch the data for signs on how things are trending.”

What’s next: September PPI will be released in mid-October.