U.S. producer prices rose modestly in November. On a sequential basis, producer prices were up 0.1 percent, a slowdown from October’s 0.6 percent and above consensus expectations of a flat growth. The slowdown in the headline figure was mainly due to energy component, which fell 5 percent sequentially, while prices rose in other parts of the report.
Food rose 1.3 percent and trade services margins were up 0.3 percent. Stripping food, energy and trade, PPI rose by 0.3 percent sequentially. Food price inflation rebounded considerably in the past two months, paying back some of the summer softness that was driven by falling food commodity prices, according to Barclays in a research report. On the service side, transportation and warehousing prices rose 1.2 percent sequentially, the third straight strong monthly print.
Personal consumption dropped 0.1 percent sequentially in November and rose 2.3 percent year-on-year, as compared with the outsized sequential gain of 0.8 percent in October. Stripping food, energy and trade services, personal consumption was up 0.3 percent sequentially and 2.7 percent year-on-year.
“Although the overall measure reported a decline, we view PPI personal consumption ex food, energy and trade at 0.3 percent m/m as broadly consistent with our forecast for core CPI at 0.2 percent m/m. More broadly for tomorrow’s November CPI report - we forecast a 0.0 percent m/m (2.2 percent y/y) increase in headline CPI prices and a 0.2 percent m/m (2.3 percent y/y) increase in core CPI prices”, added Barclays.
At 17:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was bullish at 90.2272. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
