PPI data and market response

September headline PPI was up .5% m/o/m and .3% core m/o/m vs estimates of up .3% and .2% respectively. A 3.3% m/o/m jump in energy prices after a 10.3% spike in August drove the headline print but food prices were up .9% m/o/m too. They are up 2.2% y/o/y vs 2.0% in August and the core pace is higher by 2.7% y/o/y vs 2.5% in the month before.

Goods prices ex food and energy were up a more modest .1% m/o/m and higher by 2% y/o/y. Price gains here of note were seen in alcohol, industrial chemicals, iron/steel scrap, metal forming machine tools, light trucks and sporting goods. Price declines of note were seen in footwear, pumps/compressors and household furnishings.

Services prices grew by .3% m/o/m and 2.9% y/o/y driven by the .5% m/o/m increase in trade. Keeping it from rising more was the .4% m/o/m drop in transportation and warehousing prices. This was weighed down by a 2.1% m/o/m decline in ‘airline passenger services.’ Transportation by freight prices were up by .1% m/o/m and by rail saw an increase of .6% m/o/m. Air transport though dropped by .7%. Auto retailing prices fell too. Boosting service inflation was higher ‘deposit services’, which jumped by 14% m/o/m. I’m guessing this is related to banking services. Prices were up too for machinery, equipment, parts and supplies wholesaling along with health, beauty, and optical goods retailing. Prices were up too for hotels.