MNI DATA IMPACT: US July PPI As Expected +0.2%, Energy +2.3%>

--Core PPI -0.1% Below Expected; Ex. Food, Energy, Trade -0.1%

By Kevin Kastner, Brooke Migdon and Alexandra Kelley

     WASHINGTON (MNI) - The overall July PPI data released Friday were 

as expected, leaving the year/year headline rate unchanged. Overall PPI 

increased by 0.2%, exactly as expected by both Bloomberg and the MNI 

surveys. 

     However, core PPI fell by 0.1%, well below forecasts predicting a 

0.2% gain. Declines in a number of service sector categories offset a 

strong rebound in energy prices and small gains in food and trade 

services. 

     Here are some of the key takeaways from the data released Friday: 

     - July PPI increased 0.2% (+0.169% unrounded) month/month overall 

as energy increased 2.3%, food rose 0.2%, trade services were up by 

0.2%, and the core fell by 0.1%. 

     - The year/year rate for overall PPI remained at 1.7% as recorded 

in June, while the year/year rate for core prices slowed to 2.1% from 

2.3% in the June report. The measure also excluding trade prices 

declined 0.1% month/month and increased by 1.7% year/year, slowing from  

the 2.1% year/year gain in June. 

     - Core PPI was -0.085% unrounded, on the lower side of -0.1%. The 

loss was led by declines in the services components, specifically guest 

room rental and physicians care. 

     - Energy prices jumped by 2.3% in July after sharp declines in the 

previous two months. Gasoline prices were up 5.2%. PPI excluding only 

energy posted a flat reading, while food prices rose by 0.2%. 

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

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