Monday, October 15, 2018

U.S. PPI increases 0.2% in August vs. forecast for 0.3% gain in line with forecastsU.S. PPI increases 0.2% in August vs. forecast for 0.3% gain in line with forecasts – U.S. producer price inflation and its core reading increased less than expected in August, though inflationary pressures at the factory gate were on the rise, official data showed on Wednesday.

In a report, the Commerce Department said that producer prices increased 0.2% last month, missing the forecast for a 0.3% gain and still bouncing back from a prior 0.1% drop.

Year-over-year, the producer price index (PPI) rose 2.4% in August, slightly below expectations for a gain of 2.5% but higher than the 1.9% increase in the preceding month.

The core producer price index, that excludes food and energy, rose 0.1% in August, missing forecasts for a gain of 0.2% and compared to the prior month’s 0.1% decline.

Core producer prices increased at an annualized rate of 2.0% last month, below forecasts for a 2.1% increase but higher than the gain of 1.9% in July.

Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories. Furthermore, when producers pay more for goods, they are more likely to pass price increases on to the consumer, so PPI could be considered a leading indicator of inflation.

After the report, EUR/USD was trading at 1.1985 from around 1.1977 ahead of the release of the data, GBP/USD was at 1.3282 from 1.3278 earlier, while USD/JPY was at 109.97 from 110.01 earlier.

The US dollar index, which tracks the greenback against a basket of six major rivals, was at 91.74, compared to 91.80 ahead of the report.

Meanwhile, U.S. stock futures pointed to a lower open. The Dow futures fell 0.08%, the S&P 500 futures lost 0.17%, while the Nasdaq 100 futures traded down 0.24%.

Elsewhere, in the commodities market, gold futures traded at $1,337.81 a troy ounce, compared to $1,337.48 ahead of the data, while crude oil traded at $48.66 a barrel from $48.70 earlier.

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