PPI (m/m)
Actual: +1.3%
Consensus: +0.6%
Previous: +0.5%
Largest gain since March 2022 (+1.7%)
Core PPI (m/m)
Actual: +0.7%
Consensus: +0.3%
Previous: +0.2%
Retail sales (m/m)
Actual: +0.8% ($745.0B)
Consensus: +0.3%
Previous: +1.3% (revised up from +1.1%)
Y/Y: +6.3%
July-September quarter: +5.5% y/y
Core retail sales (m/m)
Actual: +0.9%
Consensus: +0.6%
Previous: +1.4%
Weekly jobless claims (week of 10/10)
Actual: 199,000
Previous: 198,000 (+1,000)
Still below the 200,000 mark
Final demand PPI (y/y)
Actual: 6.3%
Previous: 5.6%
Highest since December 2022 (6.4%)
Goods and services (final demand, m/m)
Goods: +2.6%, largest increase since the series began in December 2009
Energy: +10.8%, gasoline: +20.3%, diesel: +21.0%
Services: +0.8%, trade margins +1.4%, transportation and warehousing +3.4%
The real signal, consumption holds and producer prices surge
PPI at +1.3% versus +0.6% expected is more than double the consensus, core PPI at +0.7% versus +0.3% rules out the simple energy-shock argument
Retail sales at +0.8% (core +0.9%) beat consensus with an upward revision to the prior month: demand is not giving way despite gasoline
The 6.3% y/y retail sales figure is nominal, gasoline mechanically inflates the total
Labor market, no crack
Claims at 199,000: fourth consecutive week below 200,000 in the documented series
Consistent with the “low hiring, low firing” read made after the +29K NFP
Pressure across the whole production chain
Processed intermediate goods: +2.5% m/m, +14.1% y/y
Unprocessed intermediate goods: +8.4% m/m, crude petroleum +28.3%
Intermediate services: +0.9% m/m, +6.3% y/y, highest since January 2023
Truck freight +3.8%, airline passenger services +5.0%
Market context at publication
Brent: $105.75 (-0.34%), WTI: $95.39 (+1.54%)
USD/JPY: 158.18 (-0.09%), no clear dollar upside reaction despite the data
Gold: $4,154.72 (+1.2%)
Indices: US500 +0.17%, USTEC -0.48%, GER40 +0.11%
Of note: eurozone industrial production -0.5% in August (Eurostat)
Consistency with this series
September CPI at +0.6% (3.7% y/y, core +0.3%), driven by gasoline at +9.1%
ISM Manufacturing Prices at 77.9% and ISM Services Prices at 74.0% foreshadowed this spread, PPI confirms it in hard data
NFP at +29K and wages at +0.1% had dropped October hike odds to about 15 to 20%, with Williams and Jefferson on “no urgency”
Implications
DXY: bullish bias, CPI, PPI and retail sales all point the same way, with solid consumption and low claims
Fed: the October pause scenario is weakened, hike odds should be revised higher, with December in sight
USD/JPY: the muted reaction (158.18) suggests the market had already priced part of the move or is waiting on Fed positioning
Oil: Brent at $105 keeps the pressure on, a US-Iran deal would reverse part of the move
Point of caution
PPI and retail sales consensus figures come from the screenshot provided, to be confirmed against the economic calendar
PPI is revised for 4 months, May to August data were already modified in this release
Retail sales are inflated by gasoline: real consumption volume may be weaker than +0.8%
Trade margins amplify PPI: transmission to CPI is neither automatic nor immediate
The labor market remains soft on job creation (NFP +29K, wages +0.1%), which limits firms’ ability to pass through these increases durably