by Wolf Richter
Wolf Street
Whiplash-causing month-to-month services PPI fell in July after hot readings in prior months. Core goods PPI is well-behaved.
The sharp deceleration on a year-over-year basis of the core Producer Price Index and the services PPI in July was a one-time shot, caused by the services PPI of July 2023 (+9.9%), the highest month-to-month reading in over two years, to fall out of the 12-month figure and be replaced by July 2024 (-1.9%), lowest month-to-month reading since March 2023.
It won’t repeat the rest of the year because all the remaining month-to-month figures that will fall out of the average over the next five months were low to negative. And the base effect that was such a tailwind in July will flip to a headwind in August and going forward.