Producer prices fall
More of the same today, as producer prices have actually begun to fall, with a few fresh charts from the Bloomberg.
Ocean freight rates fell another -1.5 per cent last month, as supply chains continue to gradually resurrect themselves.
Take a look at the speed of the decline from the 2021 peaks...
PPI goods (at final demand) fell -1.8 per cent in July, which was a huge reversal and the biggest drop since April 2020.
And so producer prices are rolling over, with the monthly index down by some -0.5 per cent, and the year-on-year result of +9.8 per cent thus way better than the expected +10.4 per cent.
Excluding food and energy, producer prices were up +7.6 per cent over the year, well down from +8.2 per cent a month earlier.
The wrap
An outright decline in producer prices for the month is an even more welcome surprise than the flat consumer prices figures reported yesterday.
The Federal Reserve will still be delivering a few more rate hikes from here, of course, but the odds of pulling off a soft landing appear to have improved markedly.
No doubt there will be some hiccups along the way, but it's getting steadily harder to believe than inflation won't be transitory now.
