by Mish

Is this the start of a price-inflation trend that the inflationistas want?

PPI Notes

  1. PPI for Final Demand rose 0.6% in January.
  2. Final demand prices rose 0.2 percent in December and 0.5 percent in November.
  3. On an unadjusted basis, the final demand index climbed 1.6 percent for the 12 months ended January 2017.
  4. In January, prices for final demand less foods, energy, and trade services rose 0.2 percent after inching up 0.1 percent in December.
  5. For the 12 months ending in January, the index for final demand less foods, energy, and trade services climbed 1.6 percent.
  6. Three-fourths of the January increase can be traced to the index for final demand energy, which jumped 4.7 percent.
  7. Prices for final demand goods less foods and energy climbed 0.4 percent.
  8. The index for final demand foods was unchanged.

Crude Daily Chart

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The dashed lines show the price of Crude at the start of the January. Crude has been steady or lower since then.

Unless there is a quick jump in price at the end of this month, the February PPI report rates to be benign. With gasoline suppliers needing to dump winter gas blend inventories, I do not expect a gas jump, but it is possible.

The price of crude could take off down the line, and that is something to watch.

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Meanwhile, there is little price pressure on food, and that equates to my own shopping experience at the consumer level.

Inflation Challenge

My Challenge to Keynesians “Prove Rising Prices Provide an Overall Economic Benefit” has gone unanswered.

There is no answer because history and logic both show that concerns over consumer price deflation are seriously misplaced.

The BIS did a study and found routine deflation was not any problem at all.

Deflation may actually boost output. Lower prices increase real incomes and wealth. And they may also make export goods more competitive,” stated the BIS study.

In central banks’ seriously misguided attempts to fight routine consumer price deflation, central bankers create very destructive asset bubbles that eventually collapse.

When bubbles burst, they trigger debt deflation, which is what central banks ought to fear.

For a discussion of the BIS study, please see Historical Perspective on CPI Deflations: How Damaging are They?

Mike “Mish” Shedlock

PPI Uneven Jump Hints at More Consumer Weakness, Trouble at Retailers

The BLS reported the Producer Price Index (PPI) for final demand rose 0.5%. This exceeded the Econoday consensus of 0.2% in a range of -0.2% to +0.3%. Details are interesting.

CPI Jumps Most Since February 2013 on Energy: Did Gasoline Prices Really Rise 7.8% in January?

The BLS reports the CPI Increased 0.6 Percent in January. That’s the largest increase since February of 2013. As with the PPI, much of the jump is oil related.

PPI Jumps 0.6% in March: Goods Up 1.0%, Services Up 0.3%

The PPI rose 0.6% with 60% of the rise due to a 1.% rise in goods, and most of that energy related.

No Significant Price Pressures: PPI Underperforms Economists’ Expectations

The Producer Price Index (PPI) for final demand rose .2% in August vs an Econoday consensus expectation of 0.3%. Excluding food and energy, the PPI rose 0.1% vs an expectation of 0.2%.

PPI Services Shows No Price Pressures

Wholesale prices show continued weakness, especially services. The BLS reports PPI for Final Demand Declines 0.1% in March. Services and goods both decreased by 0.1%. Y

PPI Jumps Due To Hurricane Energy Impact

The Producer Price Index for final demand advanced 0.4 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.2 percent in August and edged down 0.1 percent in July.

Retail Sales Rise 0.1% in February, January Revised

Retail sales rose the Econoday consensus of 0.1% in February, a weak reading. However, January was revised from a solid 0.4% to a strong 0.6%.

Warmest February in Decades Spikes Pending Home Sales

Economists are crowing over a huge and unexpected spike in pending home sales. The Econoday consensus estimate was a rebound of 2.4% following the 2.8% decline in January. Instead, the index spiked 5.5%.

Personal Income Jumped in January, But It's a One-Time Deal

Personal income rose 0.6% in January. Real income rose 0.5%. Spending rose 0.2% and real spending only 0.1%