US: Headline PPI increased 0.2% m-o-m in February - Nomura

US headline PPI increased 0.2% m-o-m in February, slightly higher than the market consensus forecast of 0.1% and while volatile components such as food (-0.4%), energy (-0.5%) and trade (-0.2%) all declined in the month, "core PPI" which excludes those components was up firmly by 0.4% m-o-m, according to analysts at Nomura.

Key Quotes

“Among services, air transportation of freight (+1.5%), airline passenger services (+1.9%) and traveler accommodation services (+3.7%) made positive contributions to core PPI. However, metrics for pipeline inflation were mixed overall as non-food intermediate processed goods prices excluding energy rose by 0.7% m-o-m while non-food unprocessed goods prices excluding energy dropped by 0.3% m-o-m.”

“As for elements that are relevant for February’s core PCE price index, several components rose steadily. Hospital prices rose 0.4% and portfolio management services prices increased by 1.2%. In addition, scheduled passenger air transportation prices increased 2.0%. We think that detailed components of PPI appear positive to core PCE inflation. Taken altogether, we now expect a 0.2% (0.212%) m-o-m increase in the core PCE price index in February.”