PPI jumps on higher gasoline, food costs
A 0.6% rise in retail sales for June barely exceeded the estimate provided by Bloomberg News, but the respectable increase was masked by a jump in auto sales and higher gasoline prices.
Excluding a 2.3% rise in autos, sales increased a less-than-expected 0.3%. Pull out the 5.0% surge in sales at gasoline stations, the ex-autos, ex-gas stations figure was down a disappointing 0.2%.
Some analysts blamed wet and cool weather for the poor showing we saw in June same-store sales, but job uncertainties and the steep recession still have consumers focused on savings and debt repayment.
Looking at the graph provided above, sales continue to muddle along and appear to have put in a bottom.
Wholesale inflation leaps
Led by a 1.1% rise in food and a 6.6% rise in energy, the Producer Price Index jumped 1.8% in June, more than double the forecast by economists.
The core rate, which removes the volatile food and energy categories, was up a disconcerting 0.5%, the highest reading since October. Year-over-year, core prices are still up 3.4% even as economic output has plunged.
We are starting to see modest price pressures at the earlier stages of production, likely due to increased costs for raw materials that have been showing up around the globe.
But the unsettling rise in both the headline and core rate was probably just a one-month aberration.
Energy prices have been receding and it seems unlikely that the 3.4% rise in the cost of light trucks and the 2.0% increase in autos. both which contributed to the higher core rate, will continue.
0 comments:
Post a Comment