US DATA
The PPI categories that feed into PCE look to have been more elevated than expected in October, both outright and versus most of their CPI equivalents.
- Airfares came in at 3.2% M/M (1.1% prior), portfolio management 3.6% (0.7% prior), medical care 0.2% (same as prior), health care services meanwhile jumped to 0.5% (0.0% prior) - a 9-month high.
- Auto insurance printed 0.1% (0.3% prior), however, and the individual categories of health care services may be less inflationary than the broader proxy may suggest (hospital inpatient services unexpectedly dropped 0.4%).
- Overall though -and especially given airfares and portfolio management - we would guess this would slightly bias up estimates of core PCE coming into the day, which looked clustered in the low 0.20% to 0.25% area.
- Here is a chart of the rough contribution to core PCE from select PPI components - note the uptick:
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