US DATA: July PPI +0.2%, core +0.4% (+0.4499% unrounded, its worst
since +0.5% in Jan, and an 8th gain) for +7.2% YOY overall and +2.5% YOY
core. In core, tobacco +2.8% (accounts for 0.1 pt of the core gain), lt
trucks +1.0%, and pharma +0.4% contributed to the gain. Food +0.6% as
Irish potatoes (+25.8%), cheese, fruits, and meats rose. Energy -0.6% as
all areas fell, led by -2.8% gasoline. Intermediate PPI was +0.2% and
crude -1.2%, so prices should moderate ahead. However, these data were
far worse than expected and show there are price pressures in selected
areas where there are few substitutes. Only saving grace might be that
PPI rarely affects CPI, so there’s no reason to up CPI ests.