US: PPI and wholesale inventories data in the limelight – Nomura

Analysts at Nomura are expecting a steady increase in March core PPI data for the US economy.

Key Quotes

“The March ISM manufacturing report indicated rising input prices amid heightened concern over the recent tariffs on steel and aluminum. The prices paid index, which often correlates with the PPI for intermediate goods, surged to the highest level since April 2011. Continued increases in input costs could exert upward pressure on PPI for intermediate goods, although this measure has yet to respond to the recent pickup in the ISM prices paid index.”

“In February, 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 fell by 0.3% m-o-m. For March, we expect a steady increase "core PPI" which excludes volatile food, energy, and trade components. Note that our CPI inflation forecast can be subject to revision after the release of the March PPI report.”

“Wholesale inventories: Wholesale inventories increased strongly by 1.1% in February according to the Census Bureau’s advance report as inventories of both durable and nondurable goods picked up. The increase was stronger than we had anticipated, suggesting greater contribution from real inventory buildup to Q1 GDP growth.”