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 (PPI) Declined 0.1% in July
Posted Under: Data Watch • Government • Inflation • PPI • Fed Reserve • Interest Rates

 
Implications:  Producer prices declined 0.1% in July, led lower by a 0.2% dip in services.  Within the service sector, margins for retailers and wholesalers led the index lower, down 0.5% in July.  Declining margins were broad-based, but were led by fuel retailers, chemical wholesalers, and auto retailers.  Goods prices also ticked lower in July, with energy prices falling 0.3%.  Taking out the typically volatile food and energy sectors, and you are left with "core" prices, which also declined 0.1% in July, but have risen 1.8% in the past twelve months, very close to the 1.9% gain in overall producer prices.  So in spite of the dip in prices in July, the trend is very close to the Fed's 2% inflation target.  As a result, today's data are unlikely to alter the Fed's view that further rate hikes are warranted, with one coming later this year, and it should soon announce the start of reductions in the size of its balance sheet.  We see a similar pattern with prices further up the production pipeline, with a drop in prices in July for both intermediate processed and unprocessed goods, but with these prices up 3.5% and 5.2% over the past year, respectively.  The Fed will keep all this in mind as it plans the path of monetary policy.  News out this morning on the Fed's other key area of focus, employment, showed that initial jobless claims rose 3,000 last week to 244,000.  Meanwhile continuing claims declined 16,000 to 1.95 million.  It's early, but taking these together and considering the Amazon hiring surge, suggests payrolls will be up in the neighborhood of 190,000 in August, a little faster than the 180,000 monthly average in the past year.

Click here for a PDF version.
Posted on Thursday, August 10, 2017 @ 11:29 AM • 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 and the Internal Revenue Code. First Trust has no knowledge of and has not been provided any information regarding any investor. Financial advisors must determine whether particular investments are appropriate for their clients. First Trust believes the financial advisor is a fiduciary, is capable of evaluating investment risks independently and is responsible for exercising independent judgment with respect to its retirement plan 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 © 2018 All rights reserved.