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Economy in Brief

UK PPI Prices: Decelerating Even As They Accelerate!
by Robert Brusca June 5, 2009

Shifting trends - The chart above is a classic example of shifting trends. While the central banks tend to focus on yr/yr prices viewing those changes are more ‘reliable,’ there is no doubt that shorter measures give more up to data. The Yr/Yr UK PPI has just fallen for the first time since 2002. Yet the real story is that prices are moving up again. Over three-months and six months seasonally adjusted prices are accelerating sharply –yes from lower lows than the Yr/Yr series but the key signal here is the acceleration. Prices are not falling any more that is the sky.

The Worm has Turned - Clearly the story of falling prices told from the headline is yesterday’s news. Prices are turning and the UK is on the cusp of change. It is the first country in Europe to have its service sector survey say that activity in that sector is expanding. Beware what you take as a barometer of health I don’t think inflation is surging again but the worm has turned. So don’t tail gate it.

UK PPI _Ex Construction
  %m/m %-SAAR
  May-09 Apr-09 Mar-09 3-mo 6-mo 12-mo 12-moY-Ago
MFG 0.3% 0.3% -0.3% 1.1% 0.9% -0.3% 9.0%
Core #N/A -0.1% 0.4% #N/A #N/A #N/A 2.3%
1-MO Lagged Core -- -- --- 2.9% 7.2% 6.3% 2.2%
Core: ex food beverages, tobacco & Petroleum
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