Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  The Producer Price Index Unexpectedly Declined 0.4% in July
Posted Under: Data Watch • Inflation • PPI

 

Implications:  Coming off the fastest three-month rise in nearly four years, producer prices pulled back in July.  But while the declines in July were broad based, and we won't be surprised if the pouting pundits of pessimism tout today's report as a reason for the Fed to hold off on raising rates in September, data are volatile and a single month's report should not be the deciding factor for monetary policy.  For example, recent reports that oil inventories are starting to decline could boost oil prices in the months ahead.  Prices for services led the index lower in July, as retailers and wholesalers saw falling margins.  Prices for goods also fell in July, with both food and energy costs declining.  But even excluding the volatile food and energy components, "core" prices fell 0.3% in July and are up a modest 0.7% in the past year.  The "core" measure is where the Fed places greater weight when making the decisions on monetary policy.   In spite of the price drop in July, the headline measure of producer price inflation is showing a pickup in pace, up at a 2.2% annualized rate in the past three months compared to a 0.5% annual rate in the past six months and a 0.2% decline from a year ago.  So while inflation remains modest, the U.S. is certainly not experiencing deflation. Rather, rising energy prices may push inflation up at a faster pace than many are expecting.  In other recent inflation news, import prices rose 0.1% in July but remain down 3.7% from a year ago.  The drop is mostly from petroleum, but not all of it; import prices are down 1.3% from a year ago even excluding petroleum.  Export prices rose 0.2% in July but remain down 3% from a year ago. 

Click here for PDF version

Posted on Friday, August 12, 2016 @ 12:29 PM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L. P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial advisors are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
Home |  Important Legal Information |  Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2019 All rights reserved.