The 0.3% PPI headline rise
The 0.3% PPI headline rise with a 0.2% core price gain matched our estimates thanks to a big 0.7% rise in goods prices with gains of 2.5% for energy and 0.5% for food, alongside a lean 0.1% service price increase. On the old SOP basis analysts saw a 0.8% headline PPI surge with a 0.4% SOP core price rise. Analysts expect the same PPI gains in October of 0.3% overall and 0.2% for the core, as oil prices climb. Energy prices are rising again, as seen through Q2, after a mid-year pause. The surge in oil prices since February was initially accompanied by a drop in the dollar that exacerbated commodity price gains, though this has reversed course since the June Brexit vote. Prices face ongoing headwinds from global growth weakness and the tail-end of the inventory overhang, though analysts still have firmness in 2016 wage and "core" prices as the cycle ages. Analysts expect headline September gains of 0.4% for CPI and 0.3% for PCE chain prices, with core price increases of 0.2% for CPI and 0.1% for PCE chain prices.