The 0.2% August U.S. PPI headline rise
The 0.2% August U.S. PPI headline rise with a 0.1% core price increase undershot estimates thanks to a lean 0.1% service price increase, with a flat trade service figure and a 0.3% gain for transportation and warehousing services. Analysts saw the largely expected figure for goods prices, with a 3.3% energy price rise and a 1.3% food price drop that left a 0.5% rise for the goods component overall. On the old SOP basis analysts saw a 0.5% headline PPI rise after a 0.2% July drop but a 0.2% June increase. Analysts tentatively expect a hurricane-led 0.5% PPI rise in September with a 0.2% core price increase thanks to a pop in gasoline prices and an assumed rise in service prices. The y/y PPI rise should climb to 2.6%, after rising to 2.4% in August from 1.9% in July, while the y/y core PPI rises to 2.1% from 2.0% in August and 1.8% in July. Oil prices have largely moved sideways in 2017, though analysts've also seen a drop in the dollar and a stronger global economy that has boosted commodity prices, after the opposite 2016 pattern of dollar and oil price gains, but global growth weakness. Upward 2017 price pressure has been limited by the absence of an inventory recovery despite a petro-rebound that is trimming excess capacity.