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Friday, October 15, 2021 5:20:28 PM EDT

PPI Updated 14-Oct-21 09:26AM ET

The Producer Price Index for September was a bit softer than expected. The index for final demand increased 0.5% month-over-month ( consensus +0.6%) and the index for final demand, less foods and energy, increased 0.2% ( consensus +0.5%).

On a year-over-year basis, the index for final demand was up 8.6%, versus 8.3% in August. That is the largest advance since the 12-month data were first calculated in November 2010.

The index for final demand, less foods and energy, was up 6.8%, versus 6.7% in August.

Nearly 80% of the increase in the index for final demand is owed to a 1.3% increase in prices for final demand goods, which included a 2.8% jump in prices for final demand energy.

Prices for final demand services increased 0.2%, the ninth consecutive advance.

The index for processed goods for intermediate demand rose 1.3% month-over-month and was up 23.9% year-over-year -- the largest increase since January 1975.

Prices for unprocessed goods for intermediate demand jumped 2.4% and were up 45.9% year-over-year.

The key takeaway from the report is in the Treasury market's initial response, which is muted and indicative once again that market participants are sniffing peak inflation. The 10-yr note yield is down two basis points to 1.53% (which is where it was just prior to the release).
Final Demand0.5%0.7%1.0%1.0%0.8%
Core (excluding ...)
Food and Energy0.2%0.6%1.0%1.0%0.7%
Food, Energy, and Trade0.1%0.3%0.9%0.5%0.7%
Final Demand Goods
Finished Goods1.5%1.0%0.6%1.2%1.1%
Final Demand Services
Intermediate Demand