US PPI Rises 0.3% in July: Final Demand Services Lead the Way
- July’s PPI increases by 0.3%.
- Final demand services rise by 0.5%.
- Portfolio management prices jump 7.6%.
The U.S. Bureau of Labor Statistics reported a 0.3% seasonally adjusted rise in the Producer Price Index (PPI) for final demand in July. This comes after a stagnant June and a 0.3% decline in May. In a year-over-year comparison, the unadjusted index for final demand recorded a 0.8% advance ending in July.
The surge in the final demand prices was primarily attributed to a 0.5% increase in the index for final demand services. Conversely, final demand goods witnessed a more modest increase, edging up by 0.1%. Notably, the final demand foods sector contributed significantly with a 0.5% rise. However, prices for final demand goods, excluding foods and energy, remained static, similar to final demand energy.
Digging deeper, the index for final demand, excluding foods, energy, and trade services, experienced a 0.2% increment in July – the most substantial growth since February. Over the past 12 months, this index has grown by 2.7%. A significant part of the July progress, about 40%, was due to a pronounced 7.6% surge in portfolio management prices. Other sectors, such as machinery and vehicle wholesaling and outpatient care, also registered positive movement. On the downside, food and alcohol retailing saw a 2.5% decline.
Given the current data and trends, the market sentiment leans slightly bullish. The consistent growth in the services sector, coupled with the steady performance of goods, indicates a robust economic backdrop. While monthly core PPI is anticipated to increase by 0.2%, market players should monitor these indices closely for any shifts that might impact future strategies.