The data continues to show slowing economic activity...
The Producer Price Index for finished goods rose 0.3 percent in July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This advance followed a 0.1-percent increase in June and a 1.0-percent decline in May. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved down 0.9 percent in July, and the crude goods index advanced 1.8 percent. On an unadjusted basis, prices for finished goods rose 0.5 percent for the 12 months ended July 2012, continuing the trend of slowing year-over-year increases following a 7.0-percent rise for the 12 months ended September 2011. (See table A.)
On a headline basis ex-food and energy things look ok. It is behind the scenes that we see trouble, specifically in intermediate goods, which continues its decline.
Don't be fooled by the folks on the street -- ex-food and energy, both of which are highly-volatile, the trend in both crude and intermediate goods is not good. Neither are demonstrating pricing power which is a very strong indication of weakening demand.
