U.S. PPI also came in below expectations... September rate hike looks increasingly unlikely

[Financial News, New York = Lee Byung-chulU.S. producer prices were unchanged in July from the previous month, falling short of market expectations. Following consumer price data released a day earlier, the latest producer price figures also signaled easing inflation pressure, making it even less likely that the Federal Reserve System (the Fed) will raise its benchmark rate in September.
The Bureau of Labor Statistics (BLS) said on the 13th local time that the Producer Price Index (PPI) for July was flat at 0.0% from the previous month. That was below the market forecast of a 0.2% increase. June PPI was revised to a 0.1% decline from an initial estimate of a 0.3% drop. On a year-over-year basis, July PPI rose 4.7%.
Core PPI, which excludes food and energy, rose 0.2% from the previous month, also missing the market estimate of 0.3%. The index excluding food, energy and trade services increased 0.4%.
The data are being read as a sign that U.S. inflationary pressure, which had intensified earlier this year because of the Iran war and President Donald Trump's tariff policy, has eased somewhat in recent months.
Goods prices, in particular, pulled down overall producer prices. In July, goods prices fell 0.7% from a month earlier. Energy prices dropped 3.1%, including a 5.7% plunge in gasoline prices. Food prices also declined 0.9%. By contrast, service prices rose 0.2%.
The labor market also showed some weakness. Initial jobless claims for the week ended Aug. 8 rose by 9,000 from the previous week to 209,000. That was also above the market forecast of 204,000. As inflation pressure eases and the labor market shows signs of slowing, the data are expected to weigh on hawkish voices within the Fed that have argued for a quick rate hike at the September Federal Open Market Committee (FOMC) meeting.




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