PPI data, consistent rise in core goods prices continues, offset by modest service gains/Jobs data weakens

May PPI was higher by one tenth for both headline and core vs the estimate of up .2% and .3% respectively but it was fully offset by the upward revisions to April. April headline was revised up by 3 tenths to -.2% while the core rate was revised up by 2 tenths to also down .2% m/o/m. The y/o/y gain of 2.6% and 3% for both headline and core compare with 2.5% and 3.2% in the month before. Food prices were up by 1 tenth m/o/m and 3.5% y/o/y. Energy prices were flat vs April but down 4.4% y/o/y.

Core goods prices rose .2% m/o/m and have been rising consistently by 2 or 3 tenths per month this year and are higher by 2.4% y/o/y.

With services, prices rose by one tenth but still up 3.2% y/o/y. A big jump was seen in margins for ‘machinery and vehicle wholesaling’ by 2.9% after a drop in the previous month of .9%. Prices rose too for traveler accommodation, apparel/footwear retailing, alcohol retailing and system software publishing. On the downside, similar to what was seen in CPI, airline passenger service prices fell 1.1%. Prices were down too for furniture retailing and Wall Street related stuff like securities brokerage, investment advice, etc… and portfolio management.

Inflation in the pipeline was apparent as core prices for processed goods were up by .4% m/o/m after a .5% gain in April and .7% rise in March.