New Zealand Q2 PPI Output +1.1% q/q (expected 0.6%) and inputs +1.4% q/q (expected 0.5%)

Quite the jump for these!

The Reserve Bank of New Zealand cut its cash rate on Wednesday. While consumer inflation has been drifting down this data has gone in the opposite direction.

Earlier from New Zealand today:

• New Zealand July Manufacturing PMI 44.0 (prior 41.1)

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The Producer Price Index (PPI) is a measure of the average prices that producers in a country receive for their outputs (PPI Outputs) and the average prices that producers pay for their inputs (PPI Inputs).

PPI Outputs:

• The PPI Outputs measure the average prices received by New Zealand producers for goods and services they produce and sell. This could be to other businesses (intermediate consumption) or to final consumers.
• cover various industries such as agriculture, manufacturing, construction, and services, among others
• rising PPI Outputs index can indicate increasing inflationary pressure as producers are getting higher prices for their goods and services. However, they might not necessarily pass these increases on to consumers

PPI Inputs:

• The PPI Inputs, on the other hand, measure the average prices paid by New Zealand producers for their inputs — the raw materials, services, and capital goods they use to produce their goods and services.
• These inputs can be sourced domestically or imported.
• When the PPI Inputs index is rising, it suggests that producers are facing higher costs, which might eventually lead to higher prices for consumers if the producers pass these costs on through higher output prices.

This article was written by Eamonn Sheridan at www.forexlive.com.