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15 Jan 2015
US PPI inflation eases further, but core PPI picks up – KBC
FXStreet (Barcelona) - The KBC Bank Research Team shares that US PPI inflation slowed less than anticipated in December, coming out at 0.3%mom versus consensus forecast at 0.4%mom, while Core PPI picked up to 2.1%YoY beating consensus again.
Key Quotes
“PPI dropped by 0.3% M/M, while a decline by 0.4% M/M was expected. The annual rate slowed from 1.4% Y/Y to 1.1% Y/Y, slightly above the consensus of 1.0% Y/Y. The breakdown shows that downward price pressures were only based in goods (‐1.2% M/M), led by a 6.6% M/M drop in energy prices, while also prices of food dropped in December (‐0.4% M/M).”
“In the services sector, PPI increased by 0.2% M/M, led by an increase in trade (0.6% M/M).”
“Core PPI, which excludes food & energy, picked up to 2.1% Y/Y, from 1.8% Y/Y in November. The core reading is now again at its highest level since May 2012. The consensus was looking for a more limited increase in core PPI, to 1.9% Y/Y.”
“Although core inflation eased substantially, the breakdown confirms that downward price pressures are only based in goods. Prices in the services sector continued to rise, easing somewhat deflation fears. It will be interesting to see whether this trend will be confirmed by the CPI inflation data tomorrow.”
Key Quotes
“PPI dropped by 0.3% M/M, while a decline by 0.4% M/M was expected. The annual rate slowed from 1.4% Y/Y to 1.1% Y/Y, slightly above the consensus of 1.0% Y/Y. The breakdown shows that downward price pressures were only based in goods (‐1.2% M/M), led by a 6.6% M/M drop in energy prices, while also prices of food dropped in December (‐0.4% M/M).”
“In the services sector, PPI increased by 0.2% M/M, led by an increase in trade (0.6% M/M).”
“Core PPI, which excludes food & energy, picked up to 2.1% Y/Y, from 1.8% Y/Y in November. The core reading is now again at its highest level since May 2012. The consensus was looking for a more limited increase in core PPI, to 1.9% Y/Y.”
“Although core inflation eased substantially, the breakdown confirms that downward price pressures are only based in goods. Prices in the services sector continued to rise, easing somewhat deflation fears. It will be interesting to see whether this trend will be confirmed by the CPI inflation data tomorrow.”