US DATA: PPI Pipeline Pressures Remain Solid Even Pre-Tariffs
Higher revisions to prior offset a slightly softer-than-expected set of PPI readings for February. Overall, pipeline price pressures remain relatively elevated vs pre-pandemic rates, suggesting that goods price inflation will remain underpinned.
- Headline PPI printed 0.0% M/M, below the 0.3% consensus, but January was revised up 0.2pp to 0.6%; core PPI (ex-food/trade/energy) saw only a modest dip to 0.2% from 0.3% prior (0.3% expected, Jan unrevised at 0.3% rounded).
- On the headline side, final demand goods prices decelerated to a 4-month low 0.3% M/M (from 0.6% prior), entirely on the back of energy prices printing a 5-month low -1.2% (foods accelerated to a 3-month high 1.7%); final demand services printed -0.2% M/M, lowest in 7 months, but this was largely on the back of a 1.0% drop in trade (which are imputed by measuring changes in margins).
- While this was the second consecutive sequential slowdown in core PPI, and the third on a Y/Y basis (3.3% vs 3.4% prior), the 3M and 6M seasonally-adjusted annualized rates of change remain elevated (3.6% / 3.0%, the 3M being a 9-month high).
- An upward drift in import prices, on the back of recent and forthcoming increases in tariffs, is one factor that is likely to see core PPI to remain elevated. This will continue to put upside pressure on core goods prices, which had been disinflationary forces for much of 2023/24.
- As we noted previously, the report is mostly watched for the inputs to the PCE price gauge, and they appeared to confirm that sequential core PCE inflation would come in above CPI as had been expected.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
RIKSBANK: Seim Re-iterates Cautious Sentiment From Jan Minutes
Little to note from Riksbank Deputy Governor Seim, whose speech summary is very concise and re-iterates her cautious sentiment from the January meeting minutes. Seim appears content with the current level of interest rates for now.
- “ The interest rate is now at a level that appears consistent with inflation at target level in the short and long term, and that makes monetary policy well positioned to manage future challenges”.
- “This is true regardless of whether domestic consumption and GDP growth turn out to be weaker than expected, or whether the tense global situation leads to supply shocks that create inflationary impulses in the Swedish economy”.
- “If the outlook for inflation and economic activity changes, we are, as always, prepared to adjust monetary policy”.
MNI: INVITE RPT: Livestreamed MNI Connect CBO's Phillip Swagel On Feb 24
You are invited to listen to a Livestreamed MNI Connect Video Conference with the Congressional Budget Office's, Phillip Swagel.
Details below:
- TOPIC OF DISCUSSION: 'The U.S. Budget and Economic Outlook’'
- DATE: Monday 24 Feb 2025
- TIME: 10:00 - 11:00 ET; 15:00 - 16:00 GMT
- This event will be run as a Zoom Webinar and is a public, on-the-record event
To register please go to: MNI Webcast Registration
US-EU: VP Vance Meeting With Commission's Von Der Leyen
US Vice President JD Vance is currently meeting with European Commission President Ursula von der Leyen on the sidelines of the AI Action Summit in Paris. The meeting is the highest-profile talks between US dministration officials and those from the EU since President Donald Trump returned to office in January. Ahead of the meeting, Vance said "The Trump administration has been very clear that we care a lot about Europe. We see a lot of economic relationship to build upon with Europe. We also want to make sure that we're actually engaged in a security partnership that's good for both Europe and the United States."
- As the meeting started, Vance said the two would discuss "some trade issues, some economic issues." Von der Leyen said the two sides should "look with optimism at our transatlantic relations” that are "deep and strong bonds”
- Addressing the AI Summit earlier today, Vance advocated for deregulation in the sector and an end to, as Politico reports "“onerous international rules” that have stifled innovation and created unnecessary hurdles for American businesses." The US (and the UK) declined to sign the joint declaration concluding the summit.
- The meeting is likely to take place in a frosty atmopsphere following the Trump administration's announcement of tariffs on steel and aluminium imports. VdL pledged 'firm and proportionate' measures in response.
