–Initial Unemploy Claims -3k to 450k for Sept 11 Labor Day Week

By Joseph Plocek

WASHINGTON (MNI) – The U.S. August producer price data were as
expected and suggest inflation remains subdued.

August PPI printed +0.4% and core +0.1% (+0.0573% unrounded), about
as expected. Over the year overall PPI is +3.1% and core +1.3%.

Food posted -0.3% on drops in vegetables, eggs, and beef. Irish
potatoes were up a massive 27.1% in an exception, a move passed only by
their 56.8% gain in June 2008.

Energy posted +2.2% after four months of drops; gasoline was +7.5%.
The last time gas moved so sharply was its +11.0% gain in January, a
part of which retraced in February.

In core, -3.0% in cleaning products and -0.4% in passenger cars
held down the gain. Advancing areas included pharmaceuticals at +0.6%,
aircraft +0.3%, and light trucks +0.2%. These offset the price drops.
Pharmaceuticals are up 5.6% over the year, which a Bureau of Labor
Statistics economist said shows “sustained price pressure.”

Intermediate PPI posted +0.3% as energy and foods gained.

Crude goods posted +2.3% as foodstuffs, feeds, and metals jumped.
Export demand was blamed for food gains and lessened China exports of
metals was blamed for metals gains by the BLS. Crude energy materials
were up just 0.5% as natural gas at -1.2% offset advances in oil and
coal.

Overall, PPI presented a modest showing, with the price gains
along the pipeline probably not a cause for alarm.

In a separate report, Initial Unemployment Claims were reported
down 3,000 to 450,000 in the September 11 week, just prior to the
payroll survey.

Seasonals expected almost a 10% drop in unadjusted claims due to
the Federal Labor Day holiday and the result was about the same. There
were two estimates: by the states of Nebraska and Virginia, both due to
technical computer issues.

Next week’s seasonal adjustment expects a rebound in claims; thus
the total is unlikely to return to the 504,000 of mid-August. Claims
appear to be steadying in the 450,000s, where they were in spring and in
July, still at a relatively high pace.

**Market News International Washington Bureau: (202) 371-2121**

[TOPICS: MAUDS$,M$U$$$,MT$$$$,MAUDR$]