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Free Access**MNI DATA IMPACT: US February PPI Below-Expected +0.1%>
--Core PPI +0.1% Vs +0.2% Expected; Also Ex. Trade Services +0.1%
--Durable Goods Orders Surprise +0.4%, But -0.1% Ex. Transportation
By Kevin Kastner, Shikha Dave, and Harrison Clarke
WASHINGTON (MNI) - The February PPI data were below expectations,
lowering the year/year rates slightly. Overall PPI rose by 0.1%,
compared with a 0.2% gain expected in both the MNI and Bloomberg
surveys, while core prices also rose 0.1%, below the 0.2% gain expected.
At the same time, January durable goods orders data were released,
showing the headline orders number was much stronger than expected with
a 0.4% gain. The MNI forecast was for a 0.5% decline, while Bloomberg
looked for a 0.4% decline.
Here are some of the key takeaways from the data released
Wednesday:
- February PPI was up 0.1% (+0.085% unrounded) month/month overall
on a gain in energy prices and the core reading, partially offset by a
decline in food prices. Trade services prices also declined.
- Due to the more modest increase for overall PPI, the year/year
rate fell to +1.9% from +2.0% in January. At the same time, the
year/year rate for core prices fell to +2.5% from +2.6% in January. Also
excluding trade prices, PPI was up 0.1% month/month and 2.3% year/year,
slower than the 2.5% year/year gain in January.
- Core PPI was +0.086% unrounded, on the low side of +0.1%, with
the major components generally mixed. There were soft gains for a number
of industrial and office categories that muted the monthly gain.
- Energy prices rose by 1.8% in February after a 3.8% drop in
January, with gasoline prices rising 3.3%. AAA noted higher gasoline
prices in mid-March than a month ago, so another gain in next month's
data is possible. Electricity prices rose 0.1% and natural gas prices
fell 0.7%. PPI excluding only energy posted a flat reading, while food
prices were down 0.3% on a sharp drop in vegetable prices.
- Durable goods orders rose 0.4% in January, mostly due to a
surprise 1.2% gain in transportation orders. The Bloomberg consensus had
expected a 0.4% decline in the headline number, while the MNI median was
for a 0.5% decline. Boeing data expected a drop in aircraft orders in
January and see a further one in February.
- Excluding transportation, new orders fell 0.1% in the month,
below the 0.1% gains expected by both the Bloomberg consensus and MNI
medians. There were gains in machinery and electrical equipment and
declines in primary metals and computers and electronics.
- Nondefense capital goods shipments fell 1.6% in the month, while
shipments ex. aircraft rose 0.8%, suggesting a positive start for first
quarter nonresidential fixed investment after weak readings in November
and December.
** MNI Washington Bureau: 202-371-2121 **
[TOPICS: MAUDS$,MT$$$$,M$U$$$,MAUDR$]
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.