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In the August data release, domestic industrial production rebounded from an idiosyncratically weak July report.

The Producer Price Index data for August arrived roughly as expected, with continued softening in commodities prices and a rise in input costs for services.

The index for total industrial production fell by 0.6% month-over-month in July for a year-over-year decline of 0.2%. This follows a series of weak ISM reports, which would seem to suggest an industrial slowdown.

Overall, the July PPI report shows an increasingly stable and muted inflation picture.

The June G.17 Industrial Production report outperformed expectations.

Overall, the June PPI reading saw continued normalization towards pre-pandemic rates of input cost growth. PPI for All Commodities increased by 0.1% month over month in June, for a 0.6% year over year increase.

Both the Manufacturing and Services side of the ISM PMI surveys showed noticeable weakness in June.

The industrial production data posted slow growth for the month of May 2024, with the index rising 0.9% over the previous month, which translates to a 0.4% increase in year over year terms.

This month’s data also shows how important it will be to parse the distinction between the “end of the supply chain resolution disinflation” and growing disinflationary pressure from slackening demand for upstream inputs.