WASHINGTON – U.S. producer prices fell unexpectedly last month, dropping 0.1% from July. The Labor Department reported Wednesday that its producer price index – which captures inflation before it hits consumers – showed that wholesale inflation decelerated in August after advancing 0.7% in July.

Wholesale services prices fell on smaller profit margins at retailers and wholesalers, which might be a sign those companies are absorbing the cost of President Donald Trump’s sweeping taxes on imports. Compared to a year earlier, producer prices were up 2.6%.

Excluding volatile food and energy prices, so-called core producer prices also fell 0.1% from July and were up 2.8% from a year earlier.

The numbers were lower than economists had forecast.

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