PPI Split — Headline 0.0% Cool, Core +0.4% HOT; Portfolio Mgmt +6.5%

Fundamentals · 2026-08-13

PPI m/m 0.0% July (BEAT vs +0.2% est, from -0.1% June) — PPI Y/Y +4.7% — Core PPI (ex food/energy/trade services) m/m +0.4% (HOT MISS vs +0.2% est, from +0.1%) — Core Y/Y +4.7% — Final demand goods -0.7% (energy -3.1%, gasoline -5.7%) — Final demand services +0.2% — Portfolio management +6.5% (BIG driver) — Intermediate processed goods -0.6% (Y/Y +9.9%)

What Is This?

• What it is: BLS monthly Producer Price Index (PPI) — publishes: (1) PPI m/m = monthly change in wholesale prices producers receive; (2) PPI Y/Y = annual change; (3) Core PPI m/m = monthly change ex food/energy/trade services (Fed's cleanest wholesale inflation signal); (4) Core Y/Y = annual core wholesale rate.
• Why it matters: Wholesale prices lead consumer prices by 1-3 months. Headline cool + Core HOT split is DEFINITIVE Fed dilemma — energy tailwind masking sticky services inflation at wholesale level; tariff pass-through hasn't fully hit yet.

Want the full explainer? Economic News Events, Explained breaks down this release and every other one we cover, in plain English.

Summary

Split PPI print. Headline 0.0% m/m (BEAT vs +0.2% est, from -0.1% June) — cool driven by energy -3.1% and gasoline -5.7%; final demand goods -0.7%. But Core PPI (ex food/energy/trade services) came in HOT at +0.4% m/m (MISS vs +0.2% est, from +0.1% June). Y/Y both 4.7% — still well above 2% target. BIG driver of core: Portfolio management services +6.5% (financial services inflation), health/beauty retailing margins. Final demand services +0.2%, driven by services less trade/transport +0.6%. Final demand construction +2.2%. Intermediate demand pipeline still HOT: processed goods Y/Y +9.9%, unprocessed +7.1%. Cross-print bifurcation: yesterday's CPI cool everywhere (Core CPI Y/Y 2.5% cycle low), but today's PPI Core HOT (+0.4%) — services/portfolio management wholesale prices don't match retail-level cooling. Trump 10-12.5% tariffs Aug 3 NOT yet in this data — pass-through hits Aug-Sept. Warsh's "supply shocks including energy" thesis: energy DOWN big (-3.1% goods) but core services inflation persists = mixed signal. Post-NFP -23K + CPI cool, Fed cut near-certain but Core PPI hot argues 25bp not 50bp. Bond market's 10Y auction weakness (4.683%) also explained: hot Core PPI + record deficits + tariff pass-through risk.

Impact on USD

• Mixed — headline cool = dovish, but Core hot = restraining factor.
• Y/Y 4.7% both metrics keeps Fed hike optionality alive in principle.
• DXY sideways; short-end holds cut probability, long-end sticky.

Impact on US Indices (ES / NQ / YM)

• Mixed — energy cool = margin relief; Core services hot = margin drag.
• Financials benefit from portfolio management inflation (asset appreciation link).
• NQ mixed — Core hot caps duration bid; XLE hit on energy.

Impact on Gold

• Bullish — stagflation stack (hot core + cool headline + labor cracking) = pure hedge fuel.
• Y/Y 4.7% inflation persistence + deficit concerns = structural bid.
• Watch $4,300; break above signals structural stagflation breakout.

TLDR

PPI Report (July 2026, released August 13):

• PPI m/m: 0.0% (BEAT vs +0.2% est, from -0.1%)
• PPI Y/Y: +4.7%
• Core PPI m/m: +0.4% (HOT MISS vs +0.2% est, from +0.1%)
• Core PPI Y/Y: +4.7%
• Final demand goods: -0.7% (energy -3.1%, gasoline -5.7%)
• Final demand services: +0.2%
• Final demand construction: +2.2%
• Portfolio management: +6.5% (BIG driver of core)
• Services less trade/transport: +0.6%
• Intermediate processed goods: -0.6% (Y/Y +9.9%)
• Intermediate unprocessed goods: -1.8% (Y/Y +7.1%)
• Yesterday CPI: cool across (Core Y/Y 2.5% cycle low)
• PPI/CPI split: wholesale services hotter than retail
• Trump 10-12.5% tariffs Aug 3 NOT in data yet
• Warsh "supply shocks including energy" mixed signal
• Explains yesterday's 10Y auction weakness (Core hot + deficits)
• Next release: September 11, 2026

Split PPI — Headline 0.0% cool (energy -3.1%) but Core HOT +0.4% (portfolio management +6.5%, services persistent) with Y/Y both 4.7%. Post-NFP -23K + CPI cool, Fed cut still near-certain but Core PPI hot argues 25bp not 50bp. Watch Retail Sales Aug 15, Jackson Hole late August, next FOMC Sept 16-17.

_For informational purposes only. Not investment advice._