This morning, the BLS released Producer Price Index (PPI) report for July.
Key Points
- PPI for final demand is unchanged in July.
- Final demand prices advanced 0.3 percent in June and 0.5 percent in May. On an unadjusted basis, the final demand index increased 3.3 percent for the 12 months ended in July.
- In July, a 0.1-percent rise in the index for final demand goods offset a 0.1-percent decline in prices for final demand services.
- The index for final demand less foods, energy, and trade services moved up 0.3 percent in July, the same as in June. For the 12 months ended in July, prices for final demand less foods, energy, and trade services climbed 2.8 percent.
Econoday Consensus
The Econoday-polled economists missed the mark badly. The Econoday consensus estimate was for the PPI to rise 0.3%.
Bond Yields Tumble
In response to benign inflation bonds yields fell across the board.
As of 12:30 the yield on the 30-year long bond fell 4.2 basis points. The 10-year yield fell 3.5 basis points and the two-year yield fell 2.1 basis points.
Mike “Mish” Shedlock
Kind of surprising after all the banter about commodities imported from China costing more. Maybe they were cancelled out by lower US prices on commodities we export to China.
It is true that prices fell on some things, such as farm commodities, that are exported to China. You may have a point.
The fact that producer price and consumer price trends are beginning to decouple may be a sign that a large shift in relative prices is underway, signaling the impending end of the boom.