US producer prices were flat in August, pointing to muted inflation pressures that should see the Federal Reserve in no hurry to raise interest rates. 

The Labor Department said today that its producer price index for final demand was unchanged as petrol and food costs fell. Producer prices had edged up 0.1% in July. 

Economists had expected a 0.1% increase last month. 

In the 12 months to August, producer prices increased 1.8% after increasing by 1.7% in July. 

The report came as Fed officials were due to start a two-day policy meeting. Data on retail sales, manufacturing, the services sector and housing have suggested the US economy is on a sustainable growth path. 

The tame producer prices report, however, implies the Fed could bide its time before lifting its benchmark overnight lending rate from near zero, where it has been since December 2008. 

Last month, prices at the factory gate were held back by a1.4% decline in petrol prices, which followed a 2.1% fall in July. 

US food prices slipped 0.5% after rising 0.4% inJ uly. Prices received for services at the final demand level increased 0.3% after nudging up 0.1% in July. 

Producer prices excluding food and energy ticked up 0.1%, slowing from a 0.2% gain in July. In the 12 months to August, the core PPI for final demand advanced 1.8% after increasing 1.6% in July.