Fiji Time: 4:33 PM on Saturday 17 March

Fiji Times Logo

/ Front page / Business

PPI drops 0.1pc

Saturday, August 12, 2017

WASHINGTON - US producer prices unexpectedly fell in July, recording their biggest drop in nearly a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate hike.

Other data on Thursday showed an increase in the number of Americans filing for unemployment benefits last week. The trend in weekly jobless claims, however, remained consistent with a tightening labour market.

"Another twist of the screw tighter for this labour market but inflation is not able to gain a foothold in this economy," said Chris Rupkey, chief economist at MUFG in New York.

"The pot is on the stove boiling but no inflation steam is coming out."

The Labor Department said its producer price index for final demand slipped 0.1 per cent last month, weighed by decreasing costs for services. That was the largest decline since August 2016 and reversed June's 0.1 per cent gain.

In the 12 months through July, the PPI increased 1.9 per cent after rising 2.0 per cent in the year through June. Economists had forecast the PPI to tick up 0.1 per cent last month and 2.2 per cent from a year ago.

A key gauge of underlying producer price pressures that excludes food, energy and trade services was unchanged last month. The so-called core PPI gained 0.2 per cent in June. The core PPI increased 1.9 per cent in the 12 months through July after advancing 2.0 per cent in June.

Though the correlation between the PPI and the consumer price index has weakened, last month's drop in producer prices could worry Fed officials who have long argued that the moderation in inflation was temporary.

Fed Chair Janet Yellen told lawmakers last month that "some special factors" were partly responsible for the low inflation readings. Inflation, which has remained below the US central bank's 2 per cent target for five years, is being watched for clues on the timing of the next interest rate increase.

The Fed is expected to announce a plan to start unwinding its $US4.2 trillion ($F8.5t) portfolio of Treasury bonds and mortgage-backed securities at a policymaking meeting next month.

Fiji Times Front Page Thumbnail

Kaila Front Page ThumbnailFiji Times & Kaila Frontpage PDF Downloads

Use the free Acrobat Reader to view.

Code Inward TTs Outward TTs
CAD 0.65100.6320
JPY 53.691350.6913
GBP 0.35690.3489
EUR 0.40560.3936
NZD 0.69210.6591
AUD 0.64290.6179
USD 0.50070.4837



Exchange Rate updated on 16th, March, 2018

Today's Most Read Stories

  1. 'Forced to go'
  2. Man released on strict bail
  3. Speaker orders Nawaikula to withdraw accusation
  4. Former inmates raise concerns
  5. Accommodation woes
  6. State to upgrade aging infrastructure
  7. Seaweed farming costly for women
  8. Solar energy project
  9. A-G clarifies ownership
  10. Motion to review Act defeated

Top Stories this Week

  1. Sims' 100th game Thursday (15 Mar)
  2. Cessna heroes Monday (12 Mar)
  3. Picking up the pieces Tuesday (13 Mar)
  4. Men urged to marry Thursday (15 Mar)
  5. Man to appear in high court for wife's death Monday (12 Mar)
  6. A star in the making Thursday (15 Mar)
  7. The faith Monday (12 Mar)
  8. Baravilala's ode to Cessna victims Thursday (15 Mar)
  9. 7s hunt Tuesday (13 Mar)
  10. Golden chance Tuesday (13 Mar)