🇺🇸 U.S. PPI & UNEMPLOYMENT CLAIMS:
- PPI 4.7% YoY (Expected: 4.9%)
- PPI 0.0% MoM (Expected: 0.2%)
- Core PPI 4.2% YoY (Expected: 4.1%)
- Core PPI 0.2% MoM (Expected: 0.3%)
- Initial Jobless Claims 209K (Expected: 202K)
- Continuing Jobless Claims 1.777M (Expected: 1.794M)
Producer price inflation (PPI—which measures the prices producers receive for their goods, i.e., inflation one step before it reaches consumers) came in consistently lower than expected in July: On a month-over-month basis, prices remained flat (0.0%); year-over-year, the PPI came in at 4.7%, below the consensus estimate. Initial jobless claims rose slightly but remain near their lows.
What does this mean for the stock market?
Low producer price inflation takes pressure off the interest rate path: An interest rate hike is thus less likely, making a hold on the benchmark rate the more probable scenario.
In the short term, this could provide support for stocks—the key factor remains whether the slowing price momentum will persist in the coming months.
Sources:
https://www.bls.gov/news.release/ppi.nr0.htm
https://investinglive.com/news/us-initial-claims-for-the-current-week-209k-vs-202k-estimate/
