Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  The Producer Price Index Rose 0.2% in July
Posted Under: Data Watch • PPI
Supporting Image for Blog Post

 
Implications: Producer prices rose faster than the consensus expected for a third straight month and have now risen at the fastest three-month pace since early 2011. The service sector led the way in July, rising 0.4% as prices for guestroom rentals, up 9.9%, accounted for nearly half the increase. Prices for goods took a breather in July, down 0.1%, but have continued to show a clear acceleration of late. While goods prices remain down 3.7% from a year ago, they are up at a 2% rate over the past six months, and up a faster 8% rate over the past three months. Energy prices, which have been the key driver behind goods prices since mid-2014, dipped 0.6% in July, but are up 35% at an annual rate over the past three months. Meanwhile, the outbreak of the bird flu that has pushed food prices higher also showed some relief in July, highlighted by a 24.8% decline in the price of eggs. While producer prices are down from a year ago, the 0.2% increase in overall producer prices in July comes on the back of a 0.4% rise in June and a 0.5% jump in May. Combined, these represent the fastest three-month rise in prices in more than four years, and show a trend in inflation above the Fed's 2% target. And while the Fed is more focused on its own expectations for future inflation, the recent trend gives them ample basis to begin raising rates in September. Further down the chain, prices remain volatile. Prices for intermediate processed goods are down 6.5% in the past year, but are up at a 6.3% annual rate over the past three months. Prices for intermediate unprocessed goods show a similar picture, down 22.6% in the past year, but up at a 5.9% rate in the past three months. Inflation is certainly not a major problem right now, but given the prolonged period of monetary looseness, expect inflation to move gradually higher over the next few years.

Click here for PDF version

Posted on Friday, August 14, 2015 @ 10:03 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
 PREVIOUS POSTS
What's All the Fuss About?
Retail Sales Increased 0.6% in July
Chinese Chicken Littles
Nonfarm Productivity Increased at a 1.3% Annual Rate in the Second Quarter
IMF Can't End Dollar's Reign
M2 and C&I Loan Growth
Could Raising the Fed Rate Spur Consumers to Spend?
Can IMF Kill Dollar with Yuan?
Nonfarm Payrolls Increased 215,000 in July
The ISM Non-Manufacturing Index Increased to 60.3 in July
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011
Expand 20102010

Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.