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US DATA: PPI Details Lean Hawkish On Net But Tracking Uncertain

US DATA
USGlobalEM BulletFixed Income BulletsData BulletBulletMarketsEmerging Market NewsForeign Exchange BulletsRegionNorth America
  • Some of the main PPI categories that feed into core PCE calculations saw an acceleration in M/M terms in September, adding 0.06pps to core PCE vs an upward revised 0.03pp in Aug (had been 0.00pp).
  • The variety of health care services that we track for it were overall slightly cooler than in Aug (adding 0.03pp vs 0.04pps last month), which is of note considering potential greater stickiness in this category. Instead, the main change came from airline fares (which using the total category for a crude seasonally adjusted approximation added +0.02pps after -0.01pps).
  • Airfares increased 1.5% M/M after -1.0% M/M (or 0.5% after -1.9% M/M NSA for domestic), fading the heavy 3.2% M/M and 3.9% M/M increases seen in the CPI series over Sep and Aug respectively.
  • That could imply some mild upside surprise to core PCE M/M estimates that post-CPI had looked to be ~0.23% M/M on average
  • Note that upward revisions to August could mean a more notable upside surprise for Y/Y figures though, potentially seeing some upside risk to the recently downward revised median FOMC forecast of 2.6% for core PCE inflation in 4Q24 (lowered from 2.8% in the June SEP).
  • Exact implications will depend on what analysts had assumed for individual PPI categories, but it looks likely that core PCE will still come in below the 0.31% M/M seen for core CPI yesterday.
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  • Some of the main PPI categories that feed into core PCE calculations saw an acceleration in M/M terms in September, adding 0.06pps to core PCE vs an upward revised 0.03pp in Aug (had been 0.00pp).
  • The variety of health care services that we track for it were overall slightly cooler than in Aug (adding 0.03pp vs 0.04pps last month), which is of note considering potential greater stickiness in this category. Instead, the main change came from airline fares (which using the total category for a crude seasonally adjusted approximation added +0.02pps after -0.01pps).
  • Airfares increased 1.5% M/M after -1.0% M/M (or 0.5% after -1.9% M/M NSA for domestic), fading the heavy 3.2% M/M and 3.9% M/M increases seen in the CPI series over Sep and Aug respectively.
  • That could imply some mild upside surprise to core PCE M/M estimates that post-CPI had looked to be ~0.23% M/M on average
  • Note that upward revisions to August could mean a more notable upside surprise for Y/Y figures though, potentially seeing some upside risk to the recently downward revised median FOMC forecast of 2.6% for core PCE inflation in 4Q24 (lowered from 2.8% in the June SEP).
  • Exact implications will depend on what analysts had assumed for individual PPI categories, but it looks likely that core PCE will still come in below the 0.31% M/M seen for core CPI yesterday.