Core Producer Price Inflation Strengthens…
- Led by a 3.3 percent decline in energy, goods prices fell for the second-straight month. Equally offsetting the goods decline, services prices, led by a 0.9 percent gain in trade services, increased for the third-straight month.
- Excluding food and energy, the producer price index for final demand increased a better-than-expected 0.3 percent, bringing the year-over-year rate up to 0.9 percent.
But Is It Enough For a Fed Move?
- Further back in the production pipeline, price trends continued to ease as processed and unprocessed intermediate goods prices fell 0.6 percent and 4.4 percent, respectively.
- As evident in today’s report, energy prices are weighing on headline inflation. The solid performance of core producer price inflation will be favorably received at the Fed, but is it enough to help warrant a rate move at next week’s meeting? We believe yes
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