Not only was the PPI lower than expected, revisions were negative but still hot for July.
The Producer Price Index was unexpectedly negative in August, down 0.1 percent according to the BLS.
PPI Final Demand Month-Over-Month
- Final Demand: -0.1 percent
- Final Demand Services: -0.2 percent
- Final Demand Goods: 0.1 percent
- Final Demand Food: 0.1 percent
- Final Demand Excluding Food and Energy: -0.1 percent
PPI Final Demand Services
Final Demand Services Details
- The index for final demand services fell 0.2 percent in August, the largest decline since moving down 0.3 percent in April. The August decrease can be traced to a 1.7-percent drop in margins for final demand trade services. (Trade indexes measure changes in margins received by wholesalers and retailers.)
- The indexes for final demand services less trade, transportation, and warehousing and for final demand transportation and warehousing services increased, 0.3 percent and 0.9 percent, respectively.
- Product Detail: Three quarters of the August decrease in prices for final demand services can be attributed to a 3.9-percent decline in margins for machinery and vehicle wholesaling. The indexes for professional and commercial equipment wholesaling, chemicals and allied products wholesaling, furniture retailing, food and alcohol retailing, and data processing and related services also moved lower. In contrast, prices for portfolio management advanced 2.0 percent. The indexes for truck transportation of freight and for apparel wholesaling also increased.
Final Demand Goods Details
- Prices for final demand goods inched up 0.1 percent in August, the fourth consecutive advance.
- Leading the August increase in the index for final demand goods, prices for final demand goods less foods and energy rose 0.3 percent. The index for final demand foods moved up 0.1 percent. Conversely, prices for final demand energy declined 0.4 percent.
- Product detail: A major factor in the August increase in the index for final demand goods was a 2.3-percent advance in prices for tobacco products. The indexes for beef and veal; processed poultry; printed circuit assemblies, boards, modules and modems; and electric power also rose. In contrast, prices for utility natural gas decreased 1.8 percent. The indexes for fresh and dry vegetables, chicken eggs, and copper base scrap also fell.
Falling prices for machinery and vehicles at the wholesale level are representative of glut of inventory and falling demand at the consumer level.
Intermediate Demand
The intermediate demand PPI is interesting. Tariffs are in play. I will comment separately.
PPI Final Demand Year-Over-Year
PPI Final Demand Year-Over-Year Details
- Final Demand: 2.6 percent
- Final Demand Services: 2.9 percent
- Final Demand Goods: 2.1 percent
- Final Demand Food: 3.5 percent
- Final Demand Excluding Food and Energy: 2.8 percent
Final demand goods is on an uptrend despite energy declining 1.9 percent year-over-year.
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Feels like deflation is coming in a big way eventually. The economy is bleeding jobs and demand is slowly but surely declining. The pain has only just begun.
Poor MIsh-inflatiion is under control after all
For now . . .
Like you, I’m pleased we haven’t gone off the cliff. I would like to see similar numbers for August and September as we head into the SCOTUS ruling. It would be nice for inflation to remain under control to help the justices keep their eye on the ball. The ball, of course, is that the president, especially nowadays with Congress being so divide, incompetent & paralyzed, should have the authority to make tariff policy in a real emergency which we are in. If pushing towards $40T in debt doesn’t qualify as an emergency, then I don’t know what does. We’re fast approaching an existential moment.
I do feel like the economy is slowing down fairly rapidly which, in a sense, is a good thing, because this will make it harder for companies to pass along price increases. Also, if we slow down, then MX, CA & China slow down which may help trade negotiations some.
I’m not breaking out the world’s smallest violin just yet, but I’m also hopeful we can say the fat lady sings soon.
Got Popcorn?
What a show!
Got puts?
I get it ,if numbers are bad for Trump the data is reliable if they are favorable then Trump is manipulating the data . This is comedy. The inflation numbers were below what everyone thought just not what this board was hoping for instead Mish highlights the bad numbers last month again . The inflation numbers have not materialized like all the doomdayers on this board had predicted maybe they will but they haven’t yet.
He paused them for 90 days. Still has not imposed all of them. In April he chickened out because the doomsayers were right.
There are more than enough tariffs in place to cause inflation to rise notably, if it’s going to.
Ah, yes, the infamous “maybe” of so many Trump lovers on this site.
If you believe in “maybe” you should let others believe in “maybe” as well – like ‘maybe’ Trump’s tariffs will cause inflation.
But if “maybe” is your mojo, quit your hubris about how the Other Guy was so bad, but Trump is so great.
If you believe in what Trump is doing economically, OWN it. Convince the rest of us of why it’s right, why it’s important, Quit ‘confidently’ hiding behind “maybe”
i couldn’t convince you of anything your hatred has blinded you . The political establishment has brought us to 37 trillion in debt so maybe trying something different is not a bad idea because status quo ain’t working !!!
Even more hubris? LOL
What ‘hatred’ do I have? I call life factually. The BLS numbers were revised lower; it’s happened many times in the past. There is/was no massive conspiracy for Biden.
But even with the revisions, ‘Biden’s economy’ still created net jobs over the previous four years; it’s just factual.
You personally want something different than the ‘status quo’? Good for you and your opinion. But stop being a political hack and economic-prognosticating p*ssy. Make a statement. Where does Trump’s ‘something different’ tariff and gestapo policies put the US in a year for midterm elections and three years for his tenure as President? Better off in terms of GDP? Jobs? Deficit reduction?
Or do you – like so many others here – just want to complain about the past? And not offer any other real solutions besides “maybe”
actually biden only created jobs in the government sector-which as you know, aren’t real jobs
Nice fake stats; did you get those from a fellow ZH commenter?
Of course, that kind of rhetoric is probably what Trump used when he pardoned all the J6 protestors for physically beating the Capitol police officers. They weren’t doing real jobs, right? So it’s OK to beat them
Or are you admitting that Trump’s face-hidden ICE agents are not really accomplishing any type of real job? LOL
Love the pedo in chief!
So when you have nothing intelligent to say, you call people names. How mature.
Actually, I do! And you should too. Give it a try!
HELL FREAKING YES!
Agreed. The old way isn’t the right path forward, that’s for sure.
CPI out tomorrow. We’ll see if that pushes the ten year under 4%.
It is from the BLS which now has a top line mission of pleasing Trump. The NFP and this report will get him his first rate cut.
Correct, they will do his bidding or be fired!
The job market is breaking down along with housing. With Trump in power, virtually everything is threatened.
Maybe. But were 1,500,000 plus jobs just wiped under the great Biden economy?
They have been lying to us for 40 years about the United States economy.
Plan accordingly.
And blaming Trump for everything is getting stale
This one is hilarious.
Please , The BLS overstated jobs in 2024 by about 1.5 million a case can be made that we were in recession . The agency manipulated data to make the Biden administration look good thats called election interference . So yes that group heading the BLS shouls all be fired .
And it’s called Fed / economic interference. Like Wolf says, there should be quarterly revisions, not annual ones.
Erdogan wants to sell Togg T10X ev in Germany for $33K. Turkey isn’t an EU member.
Just a gut feel, but it seems this is tariff related particularly with imports from China way down in August. Lower business volume should translate into lower cost for supplied service. Profit margins contracting would seem like improters eating some of the tariff bill. I see this as an outlier, not the norm going forward.
Figures don’t lie, liars figure. What does this say about the BLS chief for statistics?
Cost of containers are down due to lower volume. That might go a bit to keep cost low.
Slowly some narratives disappear…
Economic politburo numbers. Don’t believe your lying eyes.
Trump wants rate cuts
hmm, inflation “low”
last year or so of employment “overstated”
and oddly enough, this is when Trump now has control over the numbers
it’s the old saying, it’s not the votes that count, it’s who is counting the votes that counts
bright skies from now, forward
The BLS was overstated by 1.5 million in 2024 . Revised down during 2024 by about .5 million and another the other day by about 1 million . It was being overstated to get Biden / Harris elected and the funny thing is people like you want to blame Trump but he was not in office . Trump was right to fire that Head of the agency because they were manipulating the data just not like you think . Incompetence is the word to best describe that group that is responsible for the data . Mish has got him self quite a cult over here now but I do come for a good laugh occasionaly .
Apologize, I didnt see you posted about the job revisions.
I swear some people here are blaming trump for failing their 10th grade Algebra exam.
The whole world was great before trump.
Do they realize trump first term was really stopped by 2 years of covid shutdowns. And now he is what not even 8 months into 2nd term
Biden still has been president more than trump has LOL.
But hey its all Trumps fault
The Covid shutdown didn’t happen till March of 2020 (I know because I was on spring break skiing with my kids and the hills were shut down mid week due to the initial lock down so we lost half our ski vacation).
The election happened that Nov or 9 months later. So he hardly lost 2 years of his first term.
As for Biden, he definitely lost the first year of his term (2021) to a lock down as my kids had school from home. By Aug 2022 they were able to go back but that’s because we live in a rational state (Florida) but plenty of irrational ones remained locked down till early 2023. So Biden probably lost half or more of 2022 too.
It was not overstated to get Biden reelected.
You don’t know that you are clueless . The fact that they overstated jobs by 1.5 million during an election year that makes the administration look good is what happened they didn’t miss by 100k or so we are talking 1.5 million . Open your eyes
No problems.
All this inflation stuff is just “transient.”
I have it on good authority.
Haven’t communicated with anyone (who is paying attention) who believes these understated “estimates.”