WASHINGTON, Sept 12 Reuters U.S. producer prices increased slightly more than expected in August amid higher costs for services, but the trend remained consistent with subsiding inflation.

The producer price index for final demand rose 0.2 last month, the Labor Department39;s Bureau of Labor Statistics said on Thursday. Data for July was revised lower to show the PPI being unchanged instead of edging up 0.1 as previously reported.

Economists polled by Reuters had forecast the PPI gaining 0.1.

In the 12 months through August, the PPI increased 1.7 after advancing 2.1 in July. Government data on Wednesday showed consumer prices rising marginally in August, though some stickiness remains in inflation.

Cooling inflation and a slowdown in the labor market have positioned the Federal Reserve start its policy easing cycle next Wednesday, with a 25 basis points rate cut guaranteed.

The central bank has maintained its benchmark overnight interest rate in the current 5.255.50 range for a year, having raised it by 525 basis points in 2022 and 2023.

A 0.4 increase in services accounted for the rise in the PPI last month. Services, which dropped 0.3 in July, were last month boosted by a 4.8 surge in the prices of hotel and motel rooms. But prices for airline fares fell 0.8.

Trade services, which measure changes in margins received by wholesalers and retailers, rose 0.6. Consumers are pushing back against higher prices, limiting businesses39; pricing power.

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