US DATA PREVIEW: STRONG AUG PPI RISE SEEN BUT CORE RATE TAME
WASHINGTON (MktNews) - Producer prices in the United States are seen higher in August, as higher prices for food and fuels contribute to a higher overall reading, though including these two volatile components, PPI is seen increasing only modestly.
The median of a Market News International survey of economists forecasts is for a 0.4% rise in total PPI within a range of unchanged to +0.5%, while the median core rate is for a 0.1% increase within a range of -0.1% to +0.2%.
"Total finished good prices appear to have been boosted by another jump in energy prices, while food prices were probably close to flat," said JPMorgan economist James O'Sullivan.
During August, crude oil prices stood at $21.30/bbl, a 5.6% increase over the previous month. At the same time, the NAPM index price component posted a 9.3% increase in August to 59.8 from 54.7, further suggesting a high PPI number.
Farm prices received in August rose 3.2% after a decline of 4.1% in July.
Following a 0.9% decline in July, food prices are seen recovering as the drought in the Northeast is seen pushing prices higher.
"To the extent that this month's PPI report is largely an energy story, we doubt the Fed will be overly concerned by a 0.3% headline number, especially given the phenomenally benign core figure," according to economist Joseph Abate at Lehman Brothers. |
