by Mish

Lack of inflation has been the issue this year but July’s producer price report raises new concerns, that is disinflation. Headline prices fell an unexpected 0.1 percent with the less food & energy reading also at minus 0.1 percent and the less food, energy & trade services no better than unchanged. Year-on-year rates are all down 1 tenth, to 1.9 percent overall with less food & energy at 1.8 percent and the third reading which also excludes services at 1.9 percent.
And services are the major concern in this report. Overall services fell 0.2 percent in July with the closely watched trade services down 0.5 percent and reflecting price weakness for chemicals and also machinery. Other readings include a 0.1 percent decline for total goods, a 3rd straight monthly decline for energy, down 0.3 percent, and no change for foods.
Prices this year, in part reflecting lack of wage traction, have been unusually weak and if tomorrow’s consumer price report proves no better than today’s wholesale price report, doubts over Federal Reserve intentions to further remove stimulus, including the initiation of balance sheet unwinding, will very likely build.

PPI Goods vs Services

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The above charts are from the BLS Producer Price Report.

Our Keynesian Econoday parrot is concerned that consumers may get better prices. The parrot is always happy when consumers and producers have to pay more to get less.

The fact of the matter is standards of living rise when people pay less to get more.

Mike “Mish” Shedlock

Producer Price Inflation is Unexpectedly Negative, Huge Intermediate Declines

The Producer Price Indexes for goods and services both unexpectedly declined in September.

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%.

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.

Inflationistas Disappointed: Producer Price Index Flat, Services +0.3%, goods -0.5%

Those rooting for higher inflation were not happy with today’s PPI report that shows producer prices flat for the month vs an Econoday consensus of a 0.1 percent rise.

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.

Personal Income, Spending, PCE Inflation “Unexpectedly Weak”: Real Income and Spending Decline

The BEA reports “Real DPI decreased 0.1 percent in August and Real PCE decreased 0.1 percent. The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.1 percent.”

Producer Price Inflation Weak and Below Expectations

The Producer Price Index missed expectations across the board: Even services have been weak.

PPI Shows No Price Traction: Dear Econoday Parrot

The Producer Price Index (PPI) was up 0.1% month over month and 2.0% year over year, the latter down from 2.4%. The Econoday parrot was not happy.

Industrial Production Unexpectedly Declines

Industrial production unexpectedly slipped in March, down 0.1% vs an expected gain of 0.3%.