U.S. producer price index likely to have remained unchanged sequentially in September

U.S. producer price index data for the month of September is set to release tomorrow. According to a Wells Fargo research report, the index is likely to have remained unchanged from the previous month on a sequential basis. The headline producer price index and the core data look very similar to the CPI, with headline finished goods prices up 1.7 percent year-on-year and prices excluding food and energy items up 2.4 percent.

However, producer prices are more sensitive to swings in the business cycle, particularly in manufacturing and construction. The trade war has influenced the data, as prices for materials and inputs that complete with imports have been pulled higher.

“We suspect that the weakness in the manufacturing sector may cause producer prices to come in slightly below expectations. We expect both the overall and core PPI to rise just 0.1%, which is slightly below the consensus for the core PPI”, added Wells Fargo.