Missed this analysis on Friday.
July producer prices: economic tailwind weakens, but still in place
– by New Deal democrat
Normally I don’t pay too much attention to the producer price index, but because the steep decline in producer prices has been such a boon to businesses, and a big tailwind for the economy as a whole, whether that continues or not is important.
And in July, the deflationary pulse generally continued. While final demand producer prices for goods edged up by 0.1%, intermediate stage prices for goods declined -0.7% and raw commodity prices declined -0.3%:
The YoY comparisons improved, because last July’s big initial decline (led by energy prices) rotated out of the comparisons:
Still, end state producer prices are down -2.5% YoY, intermediate stage by -7.8%, and raw commodities by -7.0%.
Bottom line: the tailwind is not as strong as before, but it is still in place.
What to look for in tomorrow’s CPI and Friday’s PPI, Angry Bear, New Deal democrat