Preview: Due August 13 - U.S. July PPI - Prices seen subdued when data was surveyed
We expect July’s PPI to reflect more the more optimistic view of the Middle East seen at the start of the month than the riskier one later in the month. We expect gains of 0.1% overall, 0.3% ex food and energy and 0.2% ex food and trade, mostly subdued, if stronger than respective June outcomes of -0.3%, +0.2% and +0.1%.
June PPI slowed from mostly firm data in April and May, when energy strength and Middle East supply concerns did feed into the core rates, other than a sharp fall in the volatile trade series in May. July’s PPI is likely to reflect conditions in the first half of the month more than a riskier situation in the second half.
We expect energy to fall by 3.0%, extending a 6.4% June decline, but food to correct higher by 0.2% after a 0.6% June decline. We expect gains of 0.3% in both goods ex food and energy and services, though within the services breakdown trade is likely to be relatively firm, in a continued correction from May’s sharp decline. This will see ex food and energy data at 0.3% slightly stronger than a 0.2% increase ex food, energy and trade.
Strong data in July 2025 will see yr/yr growth slowing, overall to 4.8% from 5.5%, ex food and energy to 4.2% from 4.7%, and ex food, energy and trade to 4.6% from 5.1%. These will be 4-month lows overall and ex food and energy, and a 3-month low ex food, energy and trade. However all will remain significantly firmer that the Fed would wish.
