EmailThe August PPI report brought some reasonably good news on the inflation front. Producer prices were unchanged in August and were up 0.1%, excluding food and energy. That was pretty much in-line with consensus estimates.
A 1.0% decrease in prices for finished energy goods offset a 1.1% increase in finished consumer foods prices. Following the August report, prices for finished goods are up 6.5% year-over-year. That is still high, yet it is improved from the 7.3% increase seen in May and is the smallest year-over-year advance since March 2011.
Core PPI was pushed up largely by a 1.4% jump in the index for tires and higher prices for radio and television communication equipment. Core PPI is up 2.5% year-over-year.
The PPI data should be a placating factor for the Federal Reserve and will not create any undue inflation alarm ahead of the CPI report on Thursday.
