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Thursday, September 11, 2025

📊 Producer Price Index (PPI) Update: August 2025

The latest PPI data shows a mixed picture for inflation trends:

🔹 Headline vs. Core Inflation (YoY)

  • Headline PPI cooled to 2.6% YoY in August, down from 3.1% in July.

  • Core PPI (ex-food, energy, trade) remains stickier at 2.8% YoY, highlighting persistent underlying inflation pressures.

🔹 Goods vs. Services (MoM)

  • Goods prices remain highly volatile, with energy driving sharp swings earlier in 2025.

  • Services inflation is steadier, but continues to trend positive, underscoring why disinflation is proving slow.

⚖️ What this means:

  • Energy shocks are fading, but services and core inflation remain above the Fed’s 2% target.

  • The Fed is likely cautious about cutting rates too quickly, as the risk of sticky inflation lingers even while headline numbers soften.

  • A “soft landing” is still possible, but progress toward 2% inflation is uneven.

📈 See charts below for the divergence:
1️⃣ Headline vs Core PPI (YoY)
2️⃣ Goods vs Services PPI (MoM)


👉 How do you see this playing out? Is sticky services inflation enough to keep rates higher for longer?




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