In a relatively unusual turn around, US producer prices hit today ahead of tomorrow's CPI. Interestingly Consumer prices get all the headlines, it is PPI that offers the most read-throughs for Core PCE - The (old) Fed's favorite inflation gauge).
Headline producer pries were expected to rebound significantly from July's flatline as oil prices rebounded on re-escalations in the MidEast, and they printed right in line, up 04.% MoM in August (with July's revised up to +0.1% MoM. That lifted the annual PPI gain to +5.4% YoY (hotter than expected)...
Energy has flipped from deflation to re-inflation...
PPI final demand good rose 1.1% MoM, the most since May, while PPI final demand services rose 0.1%, the lowest since May.
Here are the details behind the breakdown:
Final demand goods: The index for final demand goods advanced 1.1% in August following two consecutive decreases.
- Over three-fourths of the broad-based rise can be attributed to prices for final demand energy, which moved up 4.2%.The indexes for final demand goods less foods and energy and for final demand foods increased 0.4% and 0.1%, respectively.
Product detail: Over a third of the August increase in the index for final demand goods can be traced to prices for diesel fuel, which jumped 24.1%. The indexes for gasoline, jet fuel,
