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PPI Services On High Side Of CPI Report

US DATA

Looking at some key categories in the July PPI report that feed into the PCE reading, core services look stronger than they did in the CPI report. Final demand services prices rose by 0.5% M/M, the highest since August of 2022.

  • Health care services prices were on the strong side, with outpatient health services - 2/3 of health care services - rising to a 3-month high of 0.3% M/M (from 0.0% in June). The NSA health care index rose 0.2%.
  • One of the key revisions to the PPI series as it pertains to PCE is airfares, which now show at +1.8% M/M for June vs 1.1% before; July's came in at 1.7%.
  • That suggests a slightly higher core PCE for June than previously printed but only marginally, and clearly July's reading is higher than the -8.1% in CPI.


Source: BLS, MNI

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