US: Expect steady increase in producer prices - Nomura

Analysts at Nomura suggest that for July, consensus expects a steady increase in US core PPI after headline PPI increased 0.1% m-o-m in June, partly boosted by idiosyncratic factors related to holiday demand for certain food item prices.

Key Quotes

“Further, a 0.5% decrease in energy prices lowered the headline index. Core PPI (excluding food, energy and trade) increased by a modest 0.2%. Relevant components in June’s PPI report did not strongly boost core PCE—some financial service prices were up but medical care services prices, such as hospital inpatient care and physician care services, increased only moderately. For July, consensus expects a steady increase in core PPI. Although the top-line PPI may be lowered by volatile energy components again, steady increases in core PPI would suggest stable pace of pipeline price inflation.”