A Comment -- General Comments From an Expert (A Commentary)

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. The Producer Price Index (PPI) measures changes in prices of goods and services at the producer/manufacturer level, rather than the consumer level. The PPI is traditionally known to be a leading indicator for future inflation, as a softer increase in the PPI puts less pressure on producers to increase their prices to consumers. When producers face input cost inflation, they in turn raise the prices of their goods and services to keep pace with inflation, resulting in higher inflation. The US PPI month-over-month change for July came in below analyst expectations at (0.5%) vs 0.2%, and this represents the first monthly decline since April 2020. This decline in PPI is encouraging to investors in that it signals that the headwinds for higher inflation are easing. Unlock Premium - Try 5i Free

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. The US Consumer Price Index (CPI) and the Producer Price Index (PPI) data both came in below economist expectations for July, and this translated into renewed optimism that inflation has finally peaked. The CPI number, the best-known measure for inflation, came in at 8.5% for July against expectations of 8.7%, and the month-over-month change came in at 0.0%, against estimates for an increase of 0.2%. This was the first time in months that the US inflation reading came in below analyst expectations and it has provided investors with a sigh of relief that good news may be on the horizon. Unlock Premium - Try 5i Free