Updated: 14-Sep-23 09:50 ET

August PPI

Updated: 14-Sep-23 09:50 ET

Highlights

• The August Producer Price Index for final demand increased 0.7% month-over-month (Briefing.com consensus 0.4%) following a 0.3% increase in July.
• The index for final demand, excluding food and energy, increased 0.2% month-over-month, as expected.
• On a year-over-year basis, the index for final demand was up 1.6% and the index for final demand, excluding food and energy, was up 2.2%.

Key Factors

• The index for final demand services increased 0.2% in August.
• The 2.0% increase in prices for final demand goods was the biggest increase since June 2022.
• Prices for processed goods for intermediate demand jumped 2.1% in August, which was the biggest jump since May 2022.
• The index for unprocessed goods for intermediate demand rose 1.3% in August, paced by a 5.4% increase in prices for unprocessed energy materials.

Big Picture

• The key takeaway from the report is that 80% of the rise in final demand prices was attributed to a 2.0% jump in the index for final demand goods, which was driven by a 10.5% increase in prices fir final demand energy. That understanding softens the blow of the headline surprise for the index for final demand; however, until energy prices back down, concerns about rising inflation expectations and the Fed holding higher for longer will persist.

Category	AUG	JUL	JUN	MAY	APR
Final Demand	0.7%	0.4%	-0.1%	-0.3%	0.2%
Core (excluding ...)
Food and Energy	0.2%	0.4%	-0.1%	0.2%	0.2%
Food, Energy, and Trade	0.3%	0.3%	0.2%	0.0%	0.2%
Final Demand Goods
Total	2.0%	0.3%	0.0%	-1.5%	0.1%
Energy	10.5%	0.8%	0.7%	-6.9%	0.7%
Finished Goods	2.1%	0.3%	0.3%	-1.6%	0.5%
Final Demand Services
Total	0.2%	0.5%	-0.1%	0.2%	0.2%
Trade	-0.3%	0.5%	-1.1%	0.7%	0.4%
Intermediate Demand
Processed	2.1%	-0.3%	-0.5%	-1.5%	-0.5%
Unprocessed	1.3%	2.4%	-1.0%	-5.3%	1.1%
Services	0.1%	0.5%	0.0%	0.1%	0.7%