Following on yesterday's "Inflation: Producer Price Index UNCH in July; UP 4.7% Over The last Twelve Months".
From Wolf Street, August 13:
In July, the plunge in energy prices migrated into services via truck transportation services and others.
The Producer Price Index final demand, which tracks broad inflation in prices that companies pay each other, edged down 0.03% in July from June (annualized -0.3%, blue in the chart), held down in part by the PPI for energy, which plunged for the second month in a row in July. These energy prices are part of the input costs for companies, and it spread across industries, including the services PPI via truck transportation services and other services, where energy costs weigh heavily.
But June was substantially revised higher today, to -0.1% today from -0.28% reported originally a month ago, on a massive up-revision of the services PPI.
Year-over-year, the overall PPI rose by 4.7%, still a lot of inflation, but lower than the multi-year highs in the prior three months of 5.5% to 5.9% (red). The PPI has been zigzagging higher ever since the low point in mid-2023.
The services PPI rose by 0.20% in July from June, held down by prices of truck transportation of freight, which plunged by 1.8% month to month, due to the plunge in energy prices.
The services PPI accounts for 68% of the overall PPI final demand. It’s the biggie.
But inflation was in the revision. A month ago, the BLS reported that the June services PPI rose by 0.21% in June from May. Today, it more than doubled that inflation for June to +0.47%.
Year-over-year, the services PPI rose by 3.9%, a deceleration from the upwardly revised June reading (red line). That’s a lot of inflation in services. It has been zigzagging higher since the December 2023 low....
....MUCH MORE
Also at Wolf Street:
The Fed Cuts its Reserve Management Purchases (RMPs) to Zero, Starting August 14
