US July PPI breakdown data shows that inflationary pressures on intermediate demand remain significant, although they have cooled somewhat month-on-month. Intermediate demand for processed goods fell 0.6% month-on-month, but still surged 9.9% year-on-year. Specifically, processed energy commodities fell 3.1% month-on-month, while processed food and feed fell 0.5%. Intermediate demand for unprocessed goods fell 1.8% month-on-month but rose 7.1% year-on-year, mainly dragged down by a 11.9% month-on-month plunge in crude oil prices. Intermediate service demand rose 0.5% month-on-month and 5.1% year-on-year. By production process, intermediate demand for the fourth stage rose 0.6% month-on-month (previous value 0.3%), while the first and third stages saw only a slight decline of 0.1%. The high year-on-year growth in intermediate demand indicates that upstream cost pressures remain high, which may gradually be transmitted to end-consumer prices in the future.
