US: Producer prices expected to rise by 0.2 percent in September – Wells Fargo

Research Team at Wells Fargo, notes that the US producer prices for final demand were flat in August as rising core services prices offset a decline in goods prices.

Key Quotes

“Core inflation rose 0.3 percent after a flat reading in July. The story with the producer price index (PPI) and the consumer price measures remains one of divergence between goods prices and services prices. August’s PPI print showed goods prices falling 0.4 percent for the second month in a row, whereas services prices climbed 0.1 percent in August. Input prices, which provide some sense of potential future price pressure for final demand, remained weak, suggesting no real near-term pressure on producer prices.

We expect that producer prices rose 0.2 percent in September with core prices climbing 0.1 percent. While the upward migration in producer prices remains muted, the overall trend, in our view, should result in a year-over-year PPI of around 1.2 percent by the end of Q4 this year.”