MNI DATA ANALYSIS: US PPI Rises 0.2%; +0.2% Ex. Food, Energy>

--September PPI Ex. Food, Energy, Trade +0.4%; Trade Services +0.1%

--PPI +2.6% Y/Y Vs +2.8% In August; Ex Food, Energy +2.5% Vs +2.3%

By Kevin Kastner, Harrison Clarke, and Shikha Dave

     WASHINGTON (MNI) - Final demand PPI was up 0.2% in September, as 

expected, and PPI outside of food and energy was also up 0.2% as 

expected, data released by the Bureau of Labor Statistics Wednesday 

showed. 

     The year/year rate of inflation for final demand PPI was down from 

from August, while PPI ex food and energy was up August, but the 

year/year rate for prices also excluding the volatile trade services 

category was unchanged from August. As a result, this data should not be 

a concern to inflation hawks. 

     The personal consumption price measure in the data, which some 

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

up 0.1% overall and up 0.2% ex. food and energy, and was still up 0.3% 

also excluding trade services, suggesting a mildly stronger outlook for 

the PCE inflation data. 

--ENERGY, FOOD FALL 

     Energy prices fell 0.8% in September after a 0.4% gain in August, 

led in September by a 8.1% decline in residential fuel. Most other 

energy components were also down. 

     Food prices were down 0.6% on eggs, poultry, and vegetables. 

     Trade services prices rose 0.1% in the month after large declines 

in the previous two months, while the PPI core rate the BLS prefers, 

which excludes the change in trade services as well as food and energy, 

rose 0.4% in September. 

     Within the core, there were generally upward movements in a number 

of categories. Passenger car prices fell 0.1%, while light truck prices 

rose 0.8%. However, overall final demand services prices were up 0.3%. 

--Y/Y INFLATION SLOWS 

     The year/year rates for the overall measure slowed in the month. 

Overall PPI was up 2.6% year/year in September after a 2.8% year/year 

rise in August. 

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

energy rose to 2.5% from 2.3% in August, but the year/year rate for PPI 

excluding food, energy and trade services was unchanged at 2.9%. 

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

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