2009 Economic Calendar
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Producer Price Index  
Released On 10/20/2009 8:30:00 AM For Sep, 2009
PriorConsensusConsensus RangeActual
PPI - M/M change1.7 %-0.3 %-0.8 % to 0.2 %-0.6 %
PPI less food & energy - M/M change0.2 %0.1 %-0.1 % to 0.5 %-0.1 %
PPI -Yr/Yr change-4.3 %-4.7 %
PPI less food & energy - Yr/Yr change2.3 %1.8 %

Signs of inflation have disappeared in the government data-at least temporarily as the PPI report is still lagging the recent rise in oil prices. The overall PPI fell back 0.6 percent in September after rebounding 1.7 percent the month before. September's drop was deeper than the market projection for a 0.3 percent decline in the headline PPI. The decrease in the latest month was led by a 2.4 percent fall in energy costs with food price inflation dipping 0.1 percent. The PPI core rate surprising slipped 0.1 percent, following a 0.2 percent increase in August. The decline was due in part to a drop in prices for light trucks. The consensus had forecast a 0.1 percent gain for September.

The September drop in energy prices was led by gasoline which fell 5.4 percent after a 23.0 percent surge the month before.

The core rate dipped largely on a 1.4 percent drop in light truck prices and a 0.6 percent decrease for computer prices.

For the overall PPI, the year-on-year rate dropped to minus 4.7 percent from minus 4.3 percent in August (seasonally adjusted). The core rate year-ago pace declined to up 1.8 percent from up 2.3 percent the prior month. On a not seasonally adjusted basis, the year-ago decrease for the headline PPI was 4.8 percent while the core was up 1.8 percent.

Inflation clearly has been smothered by weak demand and an earlier dip in oil prices. But in coming months we may see a rise in the headline number from recently strong oil prices. But this morning, Treasury yields were down on both the PPI and a downward revision to housing start numbers.

Consensus Outlook
The producer price index in August rebounded 1.7 percent after dropping 0.9 percent in July. The jump in the latest month was led by an 8.0 percent surge in energy costs with food price inflation was also strong with a 0.4 percent boost. However, the core rate was considerably tamer, rising 0.2 percent, following a 0.1 percent decline in July. The core rate rebounded largely on a 0.7 percent gain in passenger car prices and a 0.8 percent increase for light trucks. Looking ahead, we likely will see a dip in the headline number in September on lower energy costs as already suggested by the atypically earlier release of the CPI for September. The core finished goods PPI has both consumer and capital equipment components and those are likely to be slightly positive.

The Producer Price Index (PPI) of the Bureau of Labor Statistics (BLS) is a family of indexes that measure the average change over time in the prices received by domestic producers of goods and services. PPIs measure price change from the perspective of the seller. Effective with the January 2014 PPI data release in February 2014, BLS transitioned from the Stage of Processing (SOP) to the Final Demand-Intermediate Demand (FD-ID) aggregation system. The headline PPI (for Final Demand) measures price changes for goods, services, and construction sold to final demand: personal consumption, capital investment, government purchases, and exports.  Why Investors Care
It is always a good idea to look at more than a few months of data to get a sense of changes in established trends. Monthly changes in the PPI are mainly volatile because of sharp fluctuations in food and energy prices. The core PPI eliminates the sharper fluctuations.
Data Source: Haver Analytics
Yearly changes tend to smooth out more severe monthly fluctuations and give a better idea of the underlying rate of inflation. Even with the smoother trend, note that the core PPI does not fluctuate as much as the total PPI.
Data Source: Haver Analytics

2009 Release Schedule
Released On: 1/152/193/174/145/146/167/148/189/1510/2011/1712/15
Release For: DecJanFebMarAprMayJunJulAugSepOctNov

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