Around the end of 2018, the annual rate of prices received by producers began a downtrend which then continued through 2019. The latest figures may indicate this trend has finished, although more data is required before a firm conclusion can be reached.
The latest figures from August have been published by the Bureau of Labor Statistics and they indicate producer prices increased by 0.1% after seasonal adjustments. The result was above the expected flat result but it was still less than July’s +0.2%. On a 12-month basis, the rate of producer price inflation after seasonal adjustments increased to 1.8% after recording 1.7% in July and 1.6% in June.
“Core” PPI inflation increased by 0.3%, which is a marked turnaround from July’s comparable figure of -0.1%. Its annual rate bounced back to 2.3% which is where it had been in June before it dropped to 2.1% in July.
ANZ FX strategist John Bromhead said, “Despite this inflation measure coming in stronger than expected, the Fed is still expected to cut interest rates next week, a decision the market has now fully priced in.”