U.S. ECONOMICS: RBC Previews Today's Producer Prices Data

By MidnightTrader.com Staff,

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Producer prices are expected to have risen 0.5% in December following a 0.1% decline in November, according to Royal Bank of Canada (RY, RY.TO). It says the increase mainly reflects indications of higher gasoline and other energy prices in the month after widespread declines in November. This is expected to send the energy component up 1.8% in December following a 0.4% decline in November. Additional upward pressure is expected from food prices which are forecast to rise 0.3% after an unexpectedly benign flat reading in November, RBC says.

RBC adds remaining slack in the economy is expected to keep core price increases moderate rising 0.1% in December to match the pace of increase in November. The solid monthly increase in the headline index will send the December year-over-year rate up to 1.2% from 0.7% in November. The annual increase in core prices is expected to remain unchanged at 1.3%.

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