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**MNI: 5 Things We Learned From The January PPI Data>

By Kevin Kastner
     WASHINGTON (MNI) - The following are the key points from the 
Producer Price Index data for January released by the Labor Department 
     - The January PPI data shows a 0.4% gain, as expected, but core 
readings were stronger than expected and will likely cause some concern. 
As MNI said in a preview of the data, analysts tend to underestimate 
core PPI in January, so today's 0.4% rise for PPI ex. food and energy 
maintains is not a surprise.
     - The personal consumption price measure in the data, which some 
analysts use a preview measure for the PCE price index, rose 0.5% and 
was up 0.4% ex. food and energy and 0.4% also excluding trade services, 
suggesting consumer inflation was solid in the month. The CPI was 
reported up 0.5% in January on Wednesday and was up 0.3% excluding food 
and energy. 
     - PPI excluding food, energy, and trade services were up 0.4% 
after a 0.1% rise in the previous month, while the volatile trade 
services component was up 0.3% after a 0.4% December decline. The annual 
revisions release on Tuesday are included in the data. 
     - Year/year prices show acceleration from December. Overall PPI is 
now up 2.7% y/y vs 2.6% in December. PPI ex food, energy and trade 
services now 2.5% y/y vs 2.3% in December. However, ex food and energy 
PPI slowed to 2.2% y/y vs 2.3% in December.  
     - Energy prices were rose 3.4%, while food prices fell 0.2%. 
     ** MNI Washington Bureau: 202-371-2121 ** 

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