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Tuesday, June 25, 2019 12:50:55 PM EDT

PPI Updated 11-Jun-19 09:18AM ET

The Producer Price Index for final demand increased 0.1% ( consensus +0.1%) while the index for final demand, less food and energy, increased 0.2% ( consensus +0.2%).

The expected readings left the yr/yr changes at 1.8% and 2.3%, respectively, versus 2.2% and 2.4% in April.

The index for final demand goods declined 0.2%, paced by a 1.0% drop in final demand energy.

The index for final demand services increased 0.3%, marking its fourth straight increase.

The index for processed goods for intermediate demand declined 0.2%, leaving it down 0.6% yr/yr, which is the first 12-month decline since October 2016.

The index for unprocessed goods for intermediate demand fell 5.1% in May, which was the largest drop since January 2015. This index is down 8.9% yr/yr, which is the largest decline since June 2016.

The key takeaway from the report is that the moderation in producer price inflation should jump out in the market's mind as another data point validating an eventual rate cut by the Fed.
Final Demand0.1%0.2%0.6%0.1%-0.1%
Core (excluding ...)
Food and Energy0.2%0.1%0.3%0.1%0.3%
Food, Energy, and Trade0.4%0.4%0.0%0.1%0.2%
Final Demand Goods
Finished Goods-0.1%0.4%1.4%0.2%-0.7%
Final Demand Services
Intermediate Demand