The Bureau of Labor Statistics (BLS) has released its reading on wholesale inflation for the month of August. Its Producer Price Index (PPI) for final demand may not be as deflationary as many have come to worry about, but the reality is that even with some gains this reading just remains very far from being an overly inflationary indicator. Still, the report is likely to act as yet one more curve ball for the Federal Reserve in this month’s decision on whether to hike the fed funds rate.

August’s PPI for final demand was unchanged (0.0%) on a seasonally adjusted basis. Final demand prices were up by 0.2% in July and 0.4% in June. On an unadjusted basis, the final demand index moved down by about 0.8% for the 12 months ended in August — which now marks PPI’s seventh consecutive decline on an annual comparable basis.

Bloomberg was calling for the headline PPI to be -0.2% rather than the 0.0% reading. The core-PPI, excluding food and energy, rose 0.3% for the month of August, versus an expected 0.1% consensus estimate from Bloomberg. That core reading excluding trade services met expectations with a gain of 0.1% in August.

There was a 0.4% increase in the index for final demand services, which offset a drop of 0.6% in the prices for final demand goods. Prices for processed goods were down by 0.6%, while the index for unprocessed goods fell a sharp 4.4%. Prices for services were up by 0.7%.

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As far as why economists and investors may not worry too much about the uptick in the inflationary pressure, three-quarters of August’s gains were tied to a 0.9% rise in the index for final demand trade services. Roughly two-thirds of the decline in the final demand goods index was tied to the prices for gasoline falling 7.7% in August.

The BLS continued by saying:

Prices for final demand services less trade, transportation, and warehousing moved up 0.2 percent. Conversely, the index for final demand transportation and warehousing services dropped 0.7 percent.

Almost half of the August advance in the index for final demand services is attributable to margins for apparel, footwear, and accessories retailing, which jumped 7.0 percent. The indexes for automotive fuels and lubricants retailing; securities brokerage, dealing, investment advice, and related services; wireless telecommunication services; residential real estate loans (partial); and inpatient care also moved higher. In contrast, prices for airline passenger services declined 1.6 percent. The indexes for machinery and equipment wholesaling and guestroom rental also fell.

The index for final demand goods fell 0.6 percent in August, the largest decline since moving down 0.6 percent in April. The August decrease is mostly attributable to a 3.3-percent drop in prices for final demand energy. The index for final demand goods less foods and energy moved down 0.2 percent. Conversely, prices for final demand foods rose 0.3 percent.

If there is one thing that the easy money crowd wants Janet Yellen and the rest of the Fed members to do, it is to avoid eating eggs, visiting chicken farms or having any concerns about bird flu. The PPI reading showed that the index for chicken eggs was up by a sharp 23.2%.

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