Wholesale inflation measure rose 0.1% in July, less than expected

[progree]

6. About the core PPI

First, the PPI is always a big pain in the rear for me, because there are two core measures -

Core #1 - PPI less food, energy, and trade services -- this is the one BLS features in their news release. It is up 0.3% in July, and up 3.3% year-over year. It is also in the table below the main narrative in a column labelled "Final demand less food, energy, and trade". It is the same values as in the first sentence -- up 0.3% in July, and up 3.3% year-over-year.

BLS news release: https://www.bls.gov/news.release/ppi.nr0.htm

Core #2 - PPI less food & energy - this is the one in the CNN report. The narrative in the BLS news release doesn't have it at all. The table below the main BLS narrative has a column under "final demand goods" labeled "Less foods and energy". It has July: +0.2%, and there is no year-over-year figure for it.
. . . But see the data series below, where rounded it shows July: 0% (agreeing with the CNN "flat" characterization). And it is up 2.4% year over year.

The designations "Core #1" and "Core #2" are mine alone.


The BLS report says "(Trade indexes measure changes in margins received by wholesalers and retailers.)" and that it dropped 1.3% in July.

The BLS data series are:

# PPI http://data.bls.gov/timeseries/WPSFD4
. . . July up 0.098% (rounds to +0.1% as everyone reports), year-over-year up 2.27%

# Core PPI (without food, energy, trade services) http://data.bls.gov/timeseries/WPSFD49116
. . . July up 0.301%, year-over-year up 3.30%

# Core PPI (without food & energy) http://data.bls.gov/timeseries/WPSFD49104
. . . July down 0.0048% (which rounds to 0%, agreeing with the CNN "flat" characterization) And it is up 2.42% year over year

I won't be posting my PPI graphs today. I will update my inflation graphs tomorrow when the CPI comes out and I'll update all my inflation graphs including the PPI with the latest. But unfortunately my core PPI graph is the one the BLS features: the one less food, energy, and trade services.

The last 3 month average ANNUALIZED is:

# PPI: +1.2%

# PPI less food, energy, and trade services: +2.4%
(and continuing a very steady straight line decline from February)

# PPI less food, energy +2.5%

Which core matters? Really none of them, except the Federal Reserve likes core measures for projecting FUTURE inflation. I don't know which core measure the Fed prefers for that purpose. General Douglas MacArthur never specified which core either:

Today marks my final roll call with you. But I want you to know that when I cross the river, my last conscious thoughts will be of the Core, and the Core, and the Core. I bid you farewell.

- General MacArthur's 1962 West Point speech to the Core of Cadets
http://penelope.uchicago.edu/Thayer/E/Gazetteer/Places/America/United_States/Army/USMA/MacArthur/1962_speech_to_the_Corps.html

(except they spelled it "Corps" )