The headline was pulled down by slightly bigger declines in gasoline, natural gas and fuel oil prices than we expected. Core PPI is now up just 1.7 year over year, down from May's 2.8 peak. It will slow further in the wake of the slowing in raw-materials prices, but the Fed cares much more about the labor market than PPI.
More Quotes from Ian Shepherdson:
Just about everyone who buys a house uses a mortgage, so a sustained drop in mortgage demand tells you where home sales are going, regardless of the current sales data.Ian Shepherdson
This hugely strong report will doubtless be cited as evidence that the housing market is not slowing. However, the extremely warm January weather surely distorted these data, just as it boosted retail sales and depressed industrial production.
Ian Shepherdson
It is tempting to blame the softness of core sales on the surge in gas prices, but we think it is too soon for that.
Ian Shepherdson
His testimony leaves us thinking that a June 25 easing is far from a done deal -- it will depend on the data,
Ian Shepherdson
We doubt this can be sustained as the reality of 2.60- plus sinks in. For now, though, it looks good.
Ian Shepherdson
We doubt that this report unambiguously points to slower growth ahead --but it does mean no rate hike on (Aug.) 22,
Ian Shepherdson
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