- The PPI Ex Food & Energy for July fell .3% versus estimates of a .2% gain and a .2% increase in June.
- Empire Manufacturing for August fell to 10.3 versus estimates of 15.0 and a reading of 16.6 in July.
- Net Foreign Security Purchases for June rose to $75.1 billion versus estimates of $65.0 billion and $63.6 billion in May.
BOTTOM LINE: Prices paid to US producers increased less than forecast in July, pointing to an easing of inflationary pressures anticipated by the Fed, Bloomberg said. Computer prices dropped 1.8% last month. Food prices fell .3%. Men’s clothing and new vehicle prices also declined last month. I continue to believe inflation fears have peaked for this cycle. During the next significant global downturn, I suspect deflation and overcapacity will be the new worries.
Manufacturing in NY state expanded at a slower pace in August as companies pared inventories, Bloomberg reported. The prices paid component of the index fell to 44.6 versus a reading of 50.5 in July. The outlook component of the index fell to 35.2 versus 45 the prior month. The new orders component rose to 19.1 from 11.3 the prior month. I expect manufacturing to slow to more average levels over the intermediate-term, but continue adding to US growth as inventories are rebuilt.
International investors increased purchases of US financial assets more than expected in June, Bloomberg said. The UK and China increased their holdings of US Treasury securities. I continue to believe we are in the initial stages of a chain reaction of events that will greatly increase the demand for US assets over the intermediate-term.
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