Producer Prices Show Limited Life

Producer prices show only limited life in what is still a price-neutral economy. The PPI-FD was unchanged in August which is much better than the 0.4 percent decline in July. Energy prices were down in August excluding which and also food, prices inched 0.1 percent higher.

Final service prices rose 0.1 percent following the prior month's 0.3 percent decline though trade services, which are closely watched as a core reading, fell 0.6 percent. Final goods prices fell 0.4 percent for a second straight month.

But there is progress in trends as year-on-year rates all improved noticeably. Total prices at the wholesale level are unchanged from a year ago with the ex-food and ex-gas reading moving into positive ground at plus 1.0 percent.

This report isn't on fire but it could hint at a marginally upward surprise for tomorrow's CPI report but still isn't enough to raise the odds much for a rate hike at next week's FOMC.

Recent History Of This Indicator:
Producer prices did show pressure in both May and June but the gains proved isolated as prices fell sharply in July, down 0.4 percent overall and down 0.3 percent less food & energy. Goods prices, including for finished goods, were weak in July as were both service prices and final service prices which are a special concern.