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 Rose 0.2% in August
Posted Under: Data Watch • Inflation • PPI


Implications:  Producer prices rose 0.2% in August, led by a 9.5% jump in gasoline prices.  While initial glances may wave this off as an effect of Hurricane Harvey, the PPI survey takes place in the middle of the month, so the hurricane-related rise in gasoline costs that started in late August, and will now carry through to September, were not reflected in this report.  Looking beyond energy, rising costs for chemicals, light trucks, and potatoes helped to push goods price up 0.5% in August.  Service sector prices rose in August as well, with margins for retailers and wholesalers pushing service prices up 0.1%.  The numbers arguably most important in today's report – which comes less than a week before the Fed begins their two-day meetings next Tuesday – are the twelve-month price changes.  In the past year, producer prices have increased 2.4%, while prices excluding food and energy have increased 2%.  And even if prices are unchanged in September - very unlikely due to the hurricanes - both of these numbers will remain at or above the Fed's 2% inflation target.  A look further down the pipeline shows price increases for intermediate goods well above 2% in the past year.  Intermediate processed goods rose 0.4% in August and are up 4.1% from a year ago, while unprocessed goods declined 0.7% in August but remain up 6.8% in the past year.  As a result, today's data should bolster the Fed's view to announce the start of balance sheet normalization at this month's meeting and signal plans for one more rate hike in December. 

Click here for PDF version 

Posted on Wednesday, September 13, 2017 @ 11:17 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, the Internal Revenue Code or any other regulatory framework. Financial professionals 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. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2022 All rights reserved.