US PPI: Initial impact of COVID-19 – Wells Fargo
|The Producer Price Index in the US dropped 0.2% in March and the core rose 0.2%. Analysts at Wells Fargo point out inflation is soft and containment efforts from COVID-19 should weigh on prices.
Key Quotes:
“The trend in inflation is softening. Ex-food, energy and trade services, “core-core” PPI matched the headline for a 0.2% decline and saw its smallest year-ago gain in over three years."
“The pricing date for the survey was March 10 and response rates were consistent with February. But, company closures may weigh on response rates in the near-term. The survey was just before states started enforcing social-distancing orders, but price pressure from COVID-19 began to surface. Air passenger services prices plummeted, falling 10% in March. This measure feeds into the PCE deflator, the Fed’s preferred measure of inflation.”
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