Today's U.S. June PPI report beat estimates
Today's U.S. June PPI report beat estimates with a 0.1% headline rise and a big 0.3% core price gain, leaving a pullback in the y/y gain to 1.7% from 1.8%, but with a sustained 2.3% y/y gain for core prices. June headline price restraint reflected an oil price drop that has since been reversed, tracking the gyration in trade war fears. Though the Fed has sidestepped the use of "transitory" to describe recent core price weakness now that it's in easing mode, analysts still expect a firming in core prices in Q3-Q4, with support from an economy that is on a stronger growth path than the Fed seems willing to assume and cost pass-through of May's tariff increases. Analysts expect 0.2% July gains for the PPI headline and core. The y/y PPI headline gauge should rise to 1.8% from 1.7% in Jue but the same 1.8% in May. The y/y core PPI reading should rise to 2.4% from 2.3% in both May and June. On the old SOP basis analysts saw a -0.4% drop in the June PPI headline, after a -0.1% May decline. Analysts saw a flat core SOP price reading, after a 0.1% May figure. Energy prices have a greater weight in the old SOP measure, while service prices don't enter the SOP core. Analysts say June CPI gains of 0.1% for the headline and 0.3% for the core, and analysts expect the same PCE chain price gains of 0.1% and 0.3% respectively. Analysts expect June trade price declines of -0.2% for exports and -1.0% for imports.