US July PPI raises concerns about accelerating inflation in PCE components
Macro
The US Labor Department reported that the July producer price index was flat from the previous month and up 4.7 percent from a year earlier, a sharper-than-expected slowdown from June's 5.5 percent and the lowest level since March. The core index rose 0.2 percent from the previous month and 4.2 percent from a year earlier, both slower than in June. Meanwhile, among components that feed into the personal consumption expenditures price index, portfolio management fees jumped 6.5 percent from the previous month, a sharp acceleration from June's 0.6 percent and above May's 5.0 percent. Core PCE reached 3.42 percent year-on-year in May, the highest since October 2023, and there are concerns that the July reading could also accelerate unexpectedly. Before the Federal Open Market Committee meeting on September 15 and 16, Fed Chair Warsh is scheduled to speak at the Kansas City Fed's annual Jackson Hole symposium, making it difficult to clarify the inflation outlook and the path for interest rates.
