Tag: PPI

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China’s PPI deflation deepens in September 2024

Economic data China

In September 2024, China witnessed a decline in consumer inflation rates and an intensification of producer price deflation, despite efforts to implement additional stimulus measures aimed at reviving weak demand and stabilizing economic activity

The consumer price index (CPI) rose by 0.4% from the previous year, a slowdown from the 0.6% increase observed in August, as reported by the National Bureau of Statistics (NBS) on Sunday 13th October 2024. This increase was below the 0.6% rise economists had forecasted.

Month-on-month, the CPI remained unchanged, contrasting with the 0.4% increase in August and missing the expected 0.4% rise.

The producer price index (PPI) registered a year-on-year fall of 2.8% in September 2024, a sharper decline than the 1.8% decrease in the previous month and exceeding the 2.5% drop projected by analysts.

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U.S. PPI wholesale prices rose 0.2% in August 2024

U.S. PPI data

In August 2024, wholesale prices saw an increase that was roughly in line with expectations, marking the final inflation data point before the Federal Reserve’s anticipated interest rate cut due on 18th September 2024

The Bureau of Labor Statistics announced on Thursday 12th September 2024 that the producer price index (PPI), which measures the prices received by producers for goods and services for final demand, increased by 0.2% for the month, matching the consensus estimate.

Excluding food and energy, the PPI experienced a 0.3% increase, slightly above the 0.2% consensus estimate. This core increase persisted even when trade services were removed from the calculation.

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U.S. wholesale inflation rose 0.1% in July 2024 by less than expected

U.S. economic inflation PPI data

In July 2024, a principal indicator of U.S. wholesale inflation climbed less than anticipated, potentially paving the way for the Federal Reserve to begin reducing interest rates.

The Producer Price Index (PPI), which is a gauge of wholesale inflation, saw a modest increase of 0.1% for the month of July, falling short of the 0.2% prediction. Excluding food and energy, the PPI remained unchanged.

Year-on-year, the headline U.S. PPI ascended by 2.2%, marking a significant decline from June’s 2.7% figure.

Should the Federal Reserve not proceed now with a rate cut VERY soon, it is probable that a ‘frenzy’ of ‘catch-up’ rate cuts will ensue to counteract a struggling economy.

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China’s inflation data missed projections – rising 0.2% in June 2024

China CPI data

China’s consumer price inflation rose by 0.2% in June 2024 from a year ago, falling short of expectations. Meanwhile, producer prices remained in line with forecasts.

Main points

Consumer Price Index (CPI)

China’s CPI was expected to rise by 0.4% year-on-year in June, according to poll conducted by Reuters. However, the actual increase was only 0.2%. Lacklustre domestic demand has contributed to keeping inflation subdued in China, unlike major economies such as the U.S., where prices have remained elevated.

Producer Price Index (PPI) 

The PPI, which measures factory-gate prices, dropped by 0.8% from a year ago, aligning with expectations. This reflects the ongoing challenges faced by manufacturers and businesses.

Core CPI

Stripping out more volatile food and energy prices, core CPI rose by 0.6% year-on-year in June. While this is slightly slower than the 0.7% increase for the first six months of the year, it indicates a relatively stable inflation trend.

Pork and beef

Notably, pork prices surged by 18.1% in June compared to a year ago, while beef prices fell by 13.4%.

In summary, China’s inflation remains subdued due to weak demand, even as other global economies experience higher price pressures. Policymakers will closely monitor these trends to ensure economic stability.

Note: this information is based on data from the National Bureau of Statistics and reflects the situation as of 10th July 2024.

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U.S. wholesale prices rose 0.5% in April 2024 – exceeding expectations

U.S. PPI up

Wholesale prices surged unexpectedly in April, presenting another potential obstacle to any imminent cuts in interest rates.

The Producer Price Index (PPI), which tracks the average trajectory of selling prices received by domestic producers for their output, increased by 0.5% in April. It also showed a 2.2% rise on a year-over-year basis, representing the most significant annual gain.

The rise in services prices was a significant contributor to the overall increase in wholesale inflation, with a 0.6% uptick that represented approximately three-quarters of the total headline gain.

The core PPI, excluding volatile food and energy prices, also experienced a 0.5% increase, surpassing the estimate of 0.2%.

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U.S. markets unfazed by hot CPI data

U.S. Flag

Despite the recent surge in the Consumer Price Index (CPI), and better than expected PPI data, markets have shrugged off any concern… for now

Fickle

On Wednesday 10th April 2024 the CPI data announcement pushed the markets down and on Thursday 11th the markets recovered after the PPI data was better than expected.

CPI Report for March 2024

  • Both headline and core CPI rose by 0.4%, surpassing forecasts.
  • Bond markets are now cautious about potential rate cuts, shifting from a floor of three cuts to a possible ceiling.
  • Groceries’ inflation has eased, but housing costs remain a pressure point.
  • Fed policymakers closely monitor Supercore services inflation.
  • Solid wage gains continue to impact prices.

Producer Price Index (PPI)

PPI increased by 0.6% in February 2024. Expectations persist for June rate cuts by the Federal Reserve.

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Is the fight against inflation failing – or does it get much harder towards the end?

Stubborn inflation

Is progress on U.S. inflation stalling?

That’s the fear spreading through Wall Street as another inflation reading on Friday 16th February 2024 came in hotter-than-expected.  

The producer price index rose 0.3% in January 2024. The largest increase since August 2024 and higher than the 0.1% forecast. Excluding food and energy, core PPI jumped 0.5%, again well above consensus.

Stubborn

It is yet another sign of stubborn price pressures across the broader U.S. economy. And it came just days after an unexpectedly hot CPI reading, which gave markets a nasty jolt.  

Both data have stoked investor worries on whether inflation is firmly under control. The latest developments also reinforce the Fed’s caution that it will need to see more evidence of disinflation before committing to lower rates.

Mohamed El-Erian, Allianz chief economic advisor, posted on X that like the CPI data, the PPI report was a further indication that the last mile of the inflation battle is more complex than many had assumed (and still assume).

Some economists even argue the jump in Friday’s data will likely push January’s personal consumption expenditures price index, the Fed’s preferred inflation gauge.

The PPI data means we can finalise our core PCE forecast for January, at 0.32%. That would be the biggest increase since September. But the three months since then all saw much smaller gains.

But investors will have to wait until later this month for PCE data when it’s released on 29th February 2024.

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U.S. Wholesale inflation climbed 0.5% in September 2023, more than expected

U.S. PPI up

Wholesale U.S. prices rose more than expected in September 2023, according to latest data released indicating that inflation remains a problem for the U.S. economy.

The producer price index (PPI), which measures costs for finished goods that producers pay, increased 0.5% for the month, higher than estimated for a 0.3% rise, the U.S. Labor Department reported Wednesday 11th October 2023.

Excluding food and energy, core PPI was up 0.3%, versus the forecast for 0.2%.