IFR Preview-US Sept wholesale prices growth seen slowing


WHAT: Labor Department Producer Price Index, September

WHEN: Friday, 0830 EDT (1230 GMT)

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

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

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

"Food prices, meanwhile, appear to have started feeling someof the impact from the drought. Farm prices received were up11.1% in September according to the USDA, though that jump willtake a while to filter down to final products, and inputs shouldmake up a relatively modest share of their prices."

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

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