US October PPI 1.3% versus 1.9% expected

<ul><li>Prior month 2.2%</li><li>PPI final demand YoY 1.3% versus 1.9% expected</li><li>PPI final demand MoM -0.5% versus 0.1% expected</li><li>PPI ex Food and Energy YoY 2.4% versus 2.7% expected. Prior month 2.7%</li><li>PPI ex Food and Energy MoM 0.0% versus 0.3% expected. Prior month revised to 0.2% from 0.3%.</li><li>PPI Ex Food and Energy/Trade 2.9% versus 3.0% last month (revised from 2.8%)</li><li>PPI Ex Food and Energy/Trade 0.1% versus 0.3% last month (revised from 0.2%)</li></ul><p>More details from the Bureau of Labor Statistics on final demand for goods and services</p><ul><li>Prices for final demand goods decreased by 1.4% in October, with the primary contributor being a 6.5% drop in the index for final demand energy.</li><li>Prices for final-demand foods fell by 0.2%, while the index for final demand goods excluding foods and energy increased slightly by 0.1%.</li><li>The significant portion of the decline in the final demand goods index can be attributed to a 15.3% decrease in gasoline prices.</li><li>Other products that saw price declines include diesel fuel, hay, hayseeds, oilseeds, home heating oil, liquefied petroleum gas, and light motor trucks. However, prices for tobacco products increased by 2.4%.</li></ul><p>On the final demand services:</p><ul><li>In final demand services, prices remained unchanged in October after six consecutive increases.</li><li>The index for final demand transportation and warehousing services increased by 1.5%, while prices for final demand services excluding trade, transportation, and warehousing rose by 0.1%.</li><li>Margins for final demand trade services declined by 0.7%.</li><li>Within final demand services, airline passenger services saw a 3.1% price increase, while other sectors like chemicals and allied products wholesaling, inpatient care, and truck transportation of freight also experienced price hikes.</li><li>Conversely, margins for machinery and vehicle wholesaling declined by 2.9%, and prices fell in sectors like apparel, footwear, and accessories retailing, portfolio management, traveler accommodation services, and health, beauty, and optical goods retailing.</li></ul><p>The PPI data is thought to be a pipeline measure for CPI down the road. Yesterday CPI data showed a 0.0% increase for the month a month and 0.2% for the core measure. That led to a sharp decline in yields. The yields are higher in trading here today and trading near high levels despite the lower inflation data. </p><p>Stock futures are also not cheering (incrementally) the data this morning but are still higher on the day with the Dow futures implying a gain of 90 points. The NASDAQ futures are implying a gain of 94 points. The S&amp;P is implying a gain of 15.8 point. Those levels are marginally lower than early New York levels.</p><p>For the full report from the BLS <a href="https://www.bls.gov/news.release/pdf/ppi.pdf" target="_blank" rel="nofollow">click here</a>.</p>

This article was written by Greg Michalowski at www.forexlive.com.