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US PPI: Trend continues to point higher – Wells Fargo

The PPI Index rose in May 0.5%. Analysts at Wells Fargo point out that over the past year, the PPI for final demand is up 3.1%, consistent with moderate firming in inflation.

Key Quotes:

“Producer price inflation came in hotter than expected in May amid a sizeable jump in energy prices. Over the past year, the PPI is up 3.1 percent, which is the biggest gain in six years.”

“Although energy has been a key driver of the pickup in PPI, prices are trending up more broadly. Our preferred measure of core PPI””ex food, energy and trade services””rose to 2.6 percent on a year-ago basis, which is up from 2.1 percent last May.”

“Pipeline pressures picked up in May. Input costs for processed and unprocessed goods as well as services have all increased more than 3 percent over the past year and suggest further upward pressure on final selling prices in the months to come.”

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