MNI DATA ANALYSIS:July PPI Flat, +0.1% Ex. Food, Energy>

--July PPI Ex. Food, Energy, Trade +0.3%; Trade Services -0.8%

--PPI +3.3% Y/Y Vs +3.4% In June; Ex Food, Energy +2.7% Vs +2.8%

By Kevin Kastner, Harrison Clarke, and Shikha Dave

     WASHINGTON (MNI) - Final demand PPI was flat in July, lower 

than the 0.2% gain expected, with a lower-expected 0.1% gain outside 

of food and energy prices, data released by the Bureau of Labor 

Statistics Thursday showed. 

     The overall month/month rise was lower than the 0.1% gain seen in 

July 2017, which resulted in another fall in the year/year rate. 

Likewise, PPI ex food and energy saw a deceleration in its year/year 

rate.  

     The personal consumption price measure in the data, which some 

analysts use as a preview measure for the CPI and PCE price indexes, 

declined by 0.1% overall, by 0.1% ex. food and energy, but were up 0.2% 

also excluding trade services, suggesting a mixed picture for the PCE 

inflation data. 

     Within the core, there were generally upward movements in a 

number of categories. Passenger car prices rose 0.7%, while light truck 

prices rose 0.1%. However, overall final demand services prices were 

down 0.1%. 

--ENERGY, FOOD BOTH DOWN

     Energy prices fell 0.5% in July after a 0.8% rise in June, led in 

July by declines in a number of categories. Electric power prices fell 

by 1.6% and gasoline prices were down 0.1%, while residential natural 

gas prices fell 0.5% and home heating oil fell 3.9%. 

     Food prices fell 0.1%, with declines seen across a number of 

components, particularly meat and hayseeds. 

     Trade services prices declined 0.8% in the month, while the PPI 

core rate the BLS prefers, which excludes the change in trade services 

as well as food and energy, rose 0.3% in July. 

--Y/Y INFLATION SLOWS 

     The year/year rates for these measures showed strong acceleration. 

Overall PPI was up 3.3% year/year in July after a 3.4% year/year rise in 

June, as the headline index was up only 0.1% in July 2017. 

     At the same time, the year/year rate for PPI excluding food and 

energy fell to 2.7% from 2.8% in June, but the year/year rate for PPI 

excluding food, energy and trade services rose to 2.8% from 2.7%. 

--JOBLESS CLAIMS FALL

     Also released on Thursday, initial jobless claims fell by 6,000 to 

213,000 in the August 4 week, below the 220,000 level expected. As a 

result, the four-week moving average fell by 500 to 214,250, but 

could rise by 1,250 in the August 11 week as the decades-low 208,000 

level in the July 14 week rolls out of the equation. 

     Continuing claims rose 29,000 to 1.755 million in the July 28 week, 

while the four-week moving average for continuing claims rose by 3,000 

to 1.745 million.

     ** MNI Washington Bureau: 202-371-2121 **

[TOPICS: MAUDS$,M$U$$$,MT$$$$]