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IFR Preview-US Sept wholesale prices growth seen slowing

Thursday, 11 Oct 2012 | 3:30 PM ET

WHAT: Labor Department Producer Price Index, September

WHEN: Friday, 0830 EDT (1230 GMT)

FORECASTS (pct) Reuters IFR Previous PPI +0.7 +0.8 +1.7 PPI year/year +1.8 +1.8 +2.0 PPI ex-food/energy +0.2 +0.2 +0.2 Core PPI year/year +2.5 +2.5 +2.5

IFR COMMENTARY: "Producer prices likely rose about 0.8% in September, powered by rising fuel and farm prices. That sizable one-month jump, however, would see the y/y growth rate in headline prices recede from +2.0% to +1.8%, as even faster growth from September 2011 drops out of the comparison. Core prices probably rose an about-trend 0.2%, leaving y/y growth at +2.5%. Headline price inflation has remained quiet after the energy price volatility of the last few years has diminished for now, while core price growth remains modest, slightly off the cyclical highs seen around the turn of the year.

"Average oil prices over the month were not much changed from August, but started high before drifting off. That means the impact of fuels on the headline will likely be down to the survey's timing, which we expect to have missed much of the decline.

"Food prices, meanwhile, appear to have started feeling some of the impact from the drought. Farm prices received were up 11.1% in September according to the USDA, though that jump will take a while to filter down to final products, and inputs should make up a relatively modest share of their prices."

(Compiled by Theodore Littleton of IFR Markets, a unit of Thomson Reuters)

((Reuters Economics and Markets Desk, +1-212-646-6300; Washington Newsroom, +1-202-898-8318))

Keywords: IFR PREVIEW/USA

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