by Mish

Producer prices are mixed showing no pressure overall, unchanged in May, but tangible pressure when excluding food and energy at a higher-than-expected increase of 0.3 percent. Energy fell 3.0 percent in the month with food down 0.2 percent yet an apparent positive is a 0.3 percent gain for services with the closely watched trade services component up 1.1 percent after two months of declines. Yet this gain may not be tied to an actual increase in demand but rather to higher margins for producers who are benefiting from lower energy prices. When excluding food, energy and services, prices edged 0.1 percent lower.

This report proved unusually strong in April but was followed by weak inflation readings at the consumer level. The methodology of this report, which measures margins, often makes it difficult to read, yet the service readings in this report do offer cover for Federal Reserve policy makers who appear set to hike their target rate this week. Year-on-year rates show a 2.4 percent rate overall and a 2.1 percent less food and energy rate that is up 2 tenths in the month.

The BLS reports PPI for final demand is unchanged in May; services rise 0.3%, goods fall 0.5%

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Exclusions

This is a benign report, mostly reflecting energy.

Mike “Mish” Shedlock

Producer Prices Unexpectedly Decline

The Producer Price Index (PPI) for final goods unexpectedly declined in July. The PPI fell 0.1% as did the core PPI which excludes food and energy. THe Econoday consensus expected a 0.1% gain.

Producer Price Inflation Flat, Well Under Consensus, Bond Yields Tumble

Economists expected the Producer Price Index would jump in July. Instead, the PPI was flat and bond yields tumbled.

No Significant Price Pressures: PPI Underperforms Economists’ Expectations

The Producer Price Index (PPI) for final demand rose .2% in August vs an Econoday consensus expectation of 0.3%. Excluding food and energy, the PPI rose 0.1% vs an expectation of 0.2%.

Export Prices Rise, Led by Agriculture, Finished Goods Flat; Import Prices Barely Move

July export prices rose 0.4% vs a 0.1% rise in import prices. The rise in import prices was in-line with the Econoday consensus estimate.

The Producer Price Index Jumps a Greater Than Expected 1.3 Percent

Economists expected the PPI to increase by 0.4 percent. They were not close.

PPI Jumps 0.6% in March: Goods Up 1.0%, Services Up 0.3%

The PPI rose 0.6% with 60% of the rise due to a 1.% rise in goods, and most of that energy related.

Import Prices Flat, Export Prices Decline 0.5%

The strong dollar dampers the tariff impact on import prices except energy. Export prices decline led by agriculture.

Import Prices Jump 0.5% Led by Fuel, Export Prices Flat but Ag Prices Down 1.4%

Import prices jumped 0.5% while export prices were flat. The inflation hawks will yap. So will Trump about soybeans.

Producer Price Inflation Lower Than Expected

The PPI and core PPI each rose 0.1% month-over-month. Economists expected a 0.2% rise in both.