Updated: 14-Oct-21 09:26 ET

September PPI

Updated: 14-Oct-21 09:26 ET

Highlights

• The Producer Price Index for September was a bit softer than expected. The index for final demand increased 0.5% month-over-month (Briefing.com consensus +0.6%) and the index for final demand, less foods and energy, increased 0.2% (Briefing.com consensus +0.5%).
• On a year-over-year basis, the index for final demand was up 8.6%, versus 8.3% in August. That is the largest advance since the 12-month data were first calculated in November 2010.
• The index for final demand, less foods and energy, was up 6.8%, versus 6.7% in August.

Key Factors

• Nearly 80% of the increase in the index for final demand is owed to a 1.3% increase in prices for final demand goods, which included a 2.8% jump in prices for final demand energy.
• Prices for final demand services increased 0.2%, the ninth consecutive advance.
• The index for processed goods for intermediate demand rose 1.3% month-over-month and was up 23.9% year-over-year -- the largest increase since January 1975.
• Prices for unprocessed goods for intermediate demand jumped 2.4% and were up 45.9% year-over-year.

Big Picture

• The key takeaway from the report is in the Treasury market's initial response, which is muted and indicative once again that market participants are sniffing peak inflation. The 10-yr note yield is down two basis points to 1.53% (which is where it was just prior to the release).

Category	SEP	AUG	JUL	JUN	MAY
Final Demand	0.5%	0.7%	1.0%	1.0%	0.8%
Core (excluding ...)
Food and Energy	0.2%	0.6%	1.0%	1.0%	0.7%
Food, Energy, and Trade	0.1%	0.3%	0.9%	0.5%	0.7%
Final Demand Goods
Total	1.3%	1.0%	0.6%	1.2%	1.5%
Energy	2.8%	0.4%	2.6%	2.1%	2.2%
Finished Goods	1.5%	1.0%	0.6%	1.2%	1.1%
Final Demand Services
Total	0.2%	0.7%	1.1%	0.8%	0.6%
Trade	0.9%	1.5%	1.7%	2.1%	0.7%
Intermediate Demand
Processed	1.3%	1.0%	1.7%	1.9%	2.8%
Unprocessed	2.4%	1.0%	1.4%	2.6%	8.4%
Services	0.5%	0.3%	1.0%	1.1%	0.8%