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MNI DATA ANALYSIS: US PPI Rises 0.6%; Up 0.5% Ex Food, Energy>

--October PPI Ex. Food, Energy, Trade +0.2%; Trade Services +1.6%
--PPI +2.9% Y/Y Vs +2.6% In September; Ex Food, Energy +2.6% Vs +2.5%
By Kevin Kastner, Harrison Clarke, and Shikha Dave
     WASHINGTON (MNI) - Final demand PPI was up 0.6% in October, and PPI 
outside of food and energy was up 0.5%, both above expectations, but 
excluding trade services as well was up only 0.2%, data released by the 
Bureau of Labor Statistics Friday showed. 
     The year/year rate of inflation for final demand PPI was 2.9%, up 
from September, and PPI ex food and energy was up 2.6%, both above their 
September rates. However, the year/year rate for prices also excluding 
the volatile trade services category was up 2.8%, slower than 2.9% in 
September. The sharp gains in the headline data mask softer growth in 
underlying wholesale inflation. 
     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 0.8% overall and up 0.6% ex. food and energy, but was up only 0.2% 
also excluding trade services, suggesting moderate upside risk for the 
PCE inflation data. 
     Energy prices rose 2.7% in October after a 0.8% decline in 
September, led in October by a 7.6% gain in gasoline, and a 7.3% gain in 
residential fuel. Most other energy components were also up. 
     Food prices were up 1.0% on widespread gains in most categories. 
     Trade services prices rose 1.6% in the month after a slight 
increase in September and large decline in August, while the PPI core 
rate the BLS prefers, which excludes the change in trade services as 
well as food and energy, rose 0.2% in October. 
     Within the core, there were generally mixed movements in a number 
of categories. Passenger car prices fell 1.0%, while light truck prices 
fell 0.6%. However, overall final demand services prices were up 0.7%. 
     The year/year rates for the overall measure rose in the month. 
Overall PPI was up 2.9% year/year in October after a 2.6% year/year rise 
in September. 
     At the same time, the year/year rate for PPI excluding food and 
energy rose to 2.6% from 2.5% in September, but the year/year rate for 
PPI excluding food, energy and trade services was up 2.8%, a slower pace 
than 2.9% in September. 
     ** MNI Washington Bureau: 202-371-2121 **
[TOPICS: MAUDS$,M$U$$$,MT$$$$] 

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