PPI Shows Taming Wholesale Inflation

PPI rose 0.1% in July, and the PPI ex-food and energy was up by 0.2%.

Bloomberg had headline PPI’s consensus estimate at a gain of 0.1%, and Dow Jones had the estimate at 0.2%. Bloomberg was calling for a gain of only 0.1% in the core PPI reading, and Dow Jones was calling for a gain of 0.2% in the core PPI.

Year-over-year, PPI was up by 1.7% in July of 2014 from July of 2013. This is a good trend for those who worry about the inflation bogeyman as the price gains on an annual basis were up 1.9% in June, 2.0% in May, and 2.1% in April.

As a reminder, the BLS switched to measuring the Final Demand-Intermediate Demand aggregation system from the Stage of Processing method beginning with the January PPI report (from mid-February). This still has economists, investors, and market watchers at least somewhat confused when it comes to analyzing what each report really means on a relative basis.

Stocks have remained firm with the S&P 500 futures up 5 points and the DJIA futures up about 45 points.