After yesterday's 'peak inflation'-narrative-crushing CPI print, analysts expected headline US producer prices to drop 0.1% MoM (after falling 0.5% MoM in July) and it did but core PPI rose 0.4% MoM (more than expected 0.3% MoM).
Source: Bloomberg
Core PPI rose 7.3% YoY (considerably hotter than the +7.0% expected, but less than July's +7.6%)...
Source: Bloomberg
So just like CPI, we saw a rise in Services costs while Goods costs slipped...
40% of the increase in prices for final demand services can be attributed to margins for fuels and lubricants retailing, which rose 14.2 percent.
Over three-quarters of the decrease in prices for final demand goods is attributable to the index for gasoline, which fell 12.7 percent
The full breakdown...
A drop in Energy costs dominated the weakness...
The pipeline for headline PPI remains upwardly focused but has been reducing in recent months and fell dramatically in August...
Source: Bloomberg
Finally, margins continue to come under pressure as the CPI-PPI spread remains red for the 20th straight month...
Source: Bloomberg
So is PPI signaling peak inflation? Or are Services costs about to surprise the market?
After yesterday’s ‘peak inflation’-narrative-crushing CPI print, analysts expected headline US producer prices to drop 0.1% MoM (after falling 0.5% MoM in July) and it did but core PPI rose 0.4% MoM (more than expected 0.3% MoM).
Source: Bloomberg
Core PPI rose 7.3% YoY (considerably hotter than the +7.0% expected, but less than July’s +7.6%)…
Source: Bloomberg
So just like CPI, we saw a rise in Services costs while Goods costs slipped…
40% of the increase in prices for final demand services can be attributed to margins for fuels and lubricants retailing, which rose 14.2 percent.
Over three-quarters of the decrease in prices for final demand goods is attributable to the index for gasoline, which fell 12.7 percent
The full breakdown…
A drop in Energy costs dominated the weakness…
The pipeline for headline PPI remains upwardly focused but has been reducing in recent months and fell dramatically in August…
Source: Bloomberg
Finally, margins continue to come under pressure as the CPI-PPI spread remains red for the 20th straight month…
Source: Bloomberg
So is PPI signaling peak inflation? Or are Services costs about to surprise the market?
