Producer price inflation unexpectedly falls M/M in July, rises less than expected Y/Y

Aug. 11, 2022 8:32 AM ETBy: Liz Kiesche, SA News Editor123 Comments

Producer price index

1001Love

  • July Producer Price Index: -0.5% vs. +0.3% consensus and +1.0% prior (revised from +1.1%).
  • +9.8% Y/Y vs. +10.3% consensus and +11.3% prior (unchanged).
  • The index for final demand goods fell 1.8% in July, its largest drop since falling 2.7% in April 2020. The decline was led by a 9.0% drop in prices for final demand energy.
  • Core PPI: +0.2% vs. +0.4% consensus and +0.3% prior (revised from +0.4%).
  • +7.6% Y/Y vs. +7.8% consensus and +8.2% prior (unchanged).
  • The easing in the pace of inflation at the producer level has heartened equity investors. S&P futures were up 0.5% at 8:36 AM, Nasdaq futures +0.5%, and Dow futures +0.6%. Treasurys are also rising, pushing the 10-year yield down 3 basis points to 2.75%.
  • The index for final demand services edged up 0.1%, its third straight increase. Margins for fuels and lubricants retailing increased 12.3%; others increasing include securities brokerage and dealing (partial), hospital outpatient care, autos and auto parts retailing, and passenger transportation (partial). Prices for portfolio management, though, fell 7.9%. Others declining included: securities brokerage, dealing and investment advice; food and alcohol retailing; and long-distance motor carrying.
  • Earlier, Don't expect peak inflation to silence the Fed's hawkish squawks

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