17 Feb 2016
US PPI: Above expectations but weak inflation likely to persist - Wells Fargo
Analysts from Wells Fargo, note that today’s Producer Price Index (PPI) report showed higher-than-expected numbers, but the overall trend remains soft.
Key Quotes:
“PPI for final demand rose 0.1 percent in January. While the overall trend remains soft, weakness is moderating. Energy continues to weigh on the headline, but a pickup in services inflation was broadly based.”
“Ex-food, energy and trade services—our preferred measure of PPI—rose 0.2 percent and is up 0.8 percent from a year ago.
“The general softness in input prices suggests that weak inflation will persist in the coming months as businesses have little need to raise selling prices, in our view, to maintain margins.”
Key Quotes:
“PPI for final demand rose 0.1 percent in January. While the overall trend remains soft, weakness is moderating. Energy continues to weigh on the headline, but a pickup in services inflation was broadly based.”
“Ex-food, energy and trade services—our preferred measure of PPI—rose 0.2 percent and is up 0.8 percent from a year ago.
“The general softness in input prices suggests that weak inflation will persist in the coming months as businesses have little need to raise selling prices, in our view, to maintain margins.”