Preview: Due January 30 - U.S. December PPI - Rebound in trade to bring an above trend month
Despite signs in the CPI that inflationary pressure has slowed in Q4, we expect December PPI to show above trend gains of 0.4% both overall and ex food and energy. Ex food energy and trade however we expect a moderate gain of 0.2%, which would match November’s outcome in that series.
We expect goods PPI to rise by 0.3% overall and ex food and energy, with food and energy both seeing modest gains. Goods ex food and energy have risen by 0.2% three times and 0.4% three times in the last six month suggesting trend remains near 0.3%, as were the gains seen in February, March, April and May.
Services may be due for a bounce from a flat November given that the volatile trade series fell by 0.8% in both October and November. We expect trade to explain around half of a 0.4% December rise in services.
Yr/yr PPI would then slip to 2.8% from 3.0% overall, and to 2.9% from 3.0% ex food and energy. Ex food energy and trade we also expect yr/yr growth to slow, to 3.3% from 3.5%.
