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U.S. producer prices post first drop in one-and-a-half years

U.S. producer prices fell in August. Declines in the cost of food and trade service offset an increase in energy product costs.

Overall inflation is steadily rising, driven by a tightening labor market and robust economy.

The Federal Reserve is expected to raise interest rates later this month.

“Inflation pressures should intensify in coming quarters,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “The unemployment rate is low, GDP growth is above trend, wage growth is accelerating … and fiscal policy is supportive for the economy.”

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