PPI data shows wholesale prices advancing in line with expectations

Wholesale inflation advanced largely in line with expectations in August, data released Wednesday by the Bureau of Labor Statistics showed.

Producer prices grew by 0.4% in August over the previous month, in line with economists' expectations. The measure comes in above July's revised price increase of 0.1%.

The "core" reading — which excludes the more volatile food and energy costs — showed producer prices advanced by 0.2% over the previous month. That was slightly below the 0.3% growth economists had predicted and July's revised gain of 0.3%.

On a year-over-year basis, headline prices rose by 5.4% in August, slightly above estimates of 5.3% and advancing over the previous month's revised 4.8% print. Core inflation came in at 4.6%, in line with estimates but above July's gain of 4.2%.

The data today comes ahead of the monthly Consumer Price Index report due Friday, which market-watchers will be focused on for clues about the direction of the Federal Reserve.

Those readings are expected to show that headline CPI ticked up month-over-month while remaining flat from 12 months ago at 3.4%, while "core" CPI — the more closely watched metric — ticked down slightly on a yearly basis to 2.4%.

After Fed Chairman Kevin Warsh's speech last month at the Jackson Hole symposium, where he took a more hawkish approach than expected, bets have shifted further toward a 25-basis-point rate hike to come by the end of the year.

Markets are currently pricing in roughly 64% odds of a hike coming at the September meeting scheduled for next week, while bets for at least one hike by the Fed's December meeting sit at roughly 90%.

Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at jake.conley@yahooinc.com .