Today's U.S. August PPI report beat estimates
Today's U.S. August PPI report beat estimates with a 0.1% headline rise with a firm 0.3% core price gain, leaving average gains for both the headline and core of 0.2% over the past six months. Resumed trade war fears in August depressed goods prices, which fell -0.5%, but service prices rose by a sturdy 0.3% with gains that were widespread. Analysts expect a -0.1% PPI drop in September despite a 0.2% core price gain, as energy prices entered the month at a lean level before an ensuing bounce. The y/y PPI headline gauge should fall to 1.6% in September and the lean 1.1% area in October due to an easy comparison, after rising to 1.8% in August. Similarly, the y/y core PPI reading should rise to 2.4% in September but drop to 2.0% in October due also to an easy comparison, from 2.3% in August. After that the benefit of easy comparisons for the inflation metrics will end, and analysts should see a y/y climb into Q1 to the 2.4%-2.5% area for both measures thanks to hard comparisons, with an additional lift from a string of tariff hikes into mid-December.