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PPI chart courtesy of Bloomberg Econoday, highlights mine

The BLS reports Producer Prices for Final Demand roes 0.1 percent in May.

However, the PPI rose 0.4 percent from the previous unrevised report.

PPI Month-Over-Month Details

• The Producer Price Index for final demand advanced 0.1 percent in March, seasonally adjusted.
• The May increase in the index for final demand was led by prices for final demand services, which advanced 0.1 percent.
• The index for final demand goods rose 0.2 percent.
• Prices for final demand less foods, energy, and trade services edged up 0.1 percent in May after falling 0.1 percent in April.

PPI Month-Over-Month

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Final Demand Goods Details

• Prices for final demand goods rose 0.2 percent in May after edging up 0.1 percent in April.
• Over 80 percent of the May advance can be traced to the index for final demand goods less foods and energy, which climbed 0.2 percent.
• Prices for final demand foods increased 0.1 percent, while the index for final demand energy was unchanged.

PPI Final Demand Services

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Final Demand Services Details

• The index for final demand services inched up 0.1 percent in May following a 0.4-percent decrease in April. The advance is attributable to a 0.4-percent rise in margins for final demand trade services.
• Prices for final demand transportation and warehousing services declined 0.2 percent, while the index for final demand services less trade, transportation, and warehousing was unchanged.
• Leading the increase in prices for final demand services in May, margins for machinery and vehicle wholesaling jumped 2.9 percent. The indexes for traveler accommodation services; apparel, footwear, and accessories retailing; alcohol retailing; and system software publishing also moved higher.
• Conversely, prices for airline passenger services fell 1.1 percent. The indexes for furniture retailing; securities brokerage, dealing, investment advice, and related services; and portfolio management also decreased.

Producer Prices Year-Over-Year

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PPI Year-Over-Year Details

• The Producer Price Index for final demand was up 2.6 percent.
• Final demand goods rose 1.3 percent
• Final demand services rose 3.2 percent

Year-over-year the bottom is in as of June 2023. But what’s the short-term trend?

Trump’s tariffs are wreaking havoc with any such estimates. On-off-on-off is no way to run a business or a country.

We stepped back from the brink when Trump capitulated with China, twice. Now we have a temporary truce for 6 months, unless Trump does something to disturb it.

For discussion, please see China Keeps Leverage on the US with a 6-Month Limit on Rare Earth Exports

It’s MAED!

This is a case of Mutually Assured Economic Destruction. Either side can economically destroy the other but also itself.

However, one side has elections to worry about while the other doesn’t.

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