HVAC wholesale prices tick up slightly in August

A figure that tracks U.S. wholesale prices of HVAC equipment inched up in August, though ever so slightly from July. 

What’s happening: The Bureau of Labor Statistics on Wednesday released August’s “producer price index” (PPI), which measures the average change in selling prices that domestic manufacturers receive for their products. 

• An industry-specific index for “air conditioning, refrigeration, and forced air heating equipment” rose just .02 percent from July — essentially flat. 
• While the figure remains four percent higher than last August, it reflects the slowest monthly growth since January of this year, outside of February to March, when it declined.

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

• The big picture: The overall, economy-wide PPI dropped unexpectedly by 0.1 percent, per the release, suggesting that suppliers are absorbing tariffs and demand is softening, bolstering expectations that the Federal Reserve will start cutting interest rates next week. 

What they’re saying: “Inflation barely has a heartbeat at the producer level, which shows the tariff effect is not boosting across-the-board price pressures yet,” economist Christopher Rupkey told Reuters. 

• What to watch: September’s producer price index will be released in mid-October.