ABC news reports:
The Labor Department said the seasonally adjusted index for prices paid at the farm and factory gate increased 0.4 percent, the largest increase in five months, after gaining 0.2 percent in July.
Analysts polled by Reuters had expected producer prices to rise 0.3 percent last month. In the 12 months to August, producer prices increased 3.1 percent, slowing from the prior month's 4.2 percent increase.
Producer prices last month were bumped up by a 2.2 percent jump in energy costs. Gasoline prices surged 7.5 percent, the largest increase since January, after falling 2.2 percent in July. Food prices fell 0.3 percent after rising 0.7 percent in July.
Stripping out volatile food and energy costs, core producer prices edged up 0.1 percent last month, matching market expectations. Core PPI increased 0.3 percent in July.
Inflation remains muted amid lackluster domestic demand, which is constraining producers' ability to pass on increases to consumers. The Federal Reserve is expected to renew its pledge to keep monetary policy accommodative to support the economic recovery at a regular meeting next Tuesday.