Producer prices rose more than expected in November with upward revisions to October. 
The BLS report the Producer Price Index was rose 0.4 percent in November on top of an upward revision for October.
PPI Final Demand Key Detail Month-Over-Month
- PPI: +0.4 Percent
- Services: +0.2 Percent
- Goods: +0.7 Percent
- Excluding Food and Energy: +0.2 Percent
- Food: +3.1 Percent
- Energy: +0.2Percent
Goods Details
- Final demand goods: The index for final demand goods moved up 0.7 percent in November, the largest increase since rising 1.1 percent in February.
- Eighty percent of the broad-based advance in November can be traced to prices for final demand foods, which jumped 3.1 percent.
- A quarter of the November rise in prices for final demand goods is attributable to a 54.6-percent jump in the index for chicken eggs.
- Prices for fresh and dry vegetables, fresh fruits and melons, processed poultry, non-electronic cigarettes, and residential electric power also increased.
- In contrast, the index for oilseeds declined 4.7 percent. Prices for diesel fuel and for primary basic organic chemicals also decreased.
Services Details
- The index for final demand services rose 0.2 percent in November, the fourth consecutive increase. Leading the advance in November, margins for final demand trade services moved up 0.8 percent.
- The index for final demand services less trade, transportation, and warehousing rose 0.1 percent. Conversely, prices for final demand transportation and warehousing services fell 0.5 percent.
- Over one-third of the advance in prices for final demand services can be traced to margins for machinery and vehicle wholesaling, which increased 1.8 percent.
- The indexes for securities brokerage, dealing, and investment advice; automotive fuels and lubricants retailing; food wholesaling; food and alcohol retailing; and apparel, footwear, and accessories retailing also rose.
- In contrast, prices for airline passenger services declined 2.1 percent. The indexes for guestroom rental and for computer hardware, software, and supplies retailing also decreased.
PPI Year-Over-Year
PPI Final Demand Year-Over-Year Details
- PPI: +3.0 Percent
- Goods: +1.1 Percent
- Services: +3.9 Percent
- Food: 5.1Percent
- Excluding Food and Energy: 3.4 Percent
- Energy: -6.2
The year-over-year trends are moving up sharply despite a big decline in energy.
PPI Final Demand Services
PPI Services are 67.2 percent of the PPI. A strong uptrend started in January.
The CPI Rises 0.3 Percent in November, Rate Cut Odds Jump Anyway
On December 11, I noted The CPI Rises 0.3 Percent in November, Rate Cut Odds Jump Anyway
Neither the CPI nor the PPI reports should inspire confidence in a mass of rate cuts by the Fed.
Nonetheless a rate cut is priced in for December, January, and a third one in March.
Is this good for the GDP?
https://cwbchicago.com/2024/12/4-men-face-federal-charges-for-robbing-electrical-workers-of-high-end-camera.html
The real question here is why? Equity market at its highs, U3 at or near all time lows, money supply increasing month over month, people spending like sailors on shore leave all with inflation picking up steam again. So of course it makes sense to cut rates after all when the fire department goes to an emergency 4 alarm fire don’t they always put out the blaze by hosing down the building with gasoline? Unless of course the real problem is the banks are about to blow up and rate cuts are desperately needed to hide it. Well the Fed is losing control of the back end and candidly they should for this irresponsible nonsense. If the Fed’s real inflation target has moved to 3 (maybe even 4 or 5) percent then we are likely about to get a cataclysmic bond and general market repricing event. I suspect just in time to hobble the Trump presidency. They should be careful if that is so because it is treason to engineer something like that. Mind you maybe fixed income traders on institutional desks are too busy trading crypto in their PA to care. That has to be the excuse north of the border where they just cut rates by 50 beeps and their entire yield curve is actually more than 115 basis points through ours. Talk about insanely expensive bonds in a country that openly talks about inflation having a target range between 1 and 3 percent and you that’s a lie. Its worse because if Trump imposes punitive tariffs Canada goes poof with its debt load. Why anyone wants to be long our longer dated bonds is beyond me. Anyone that wants to buy Canadian bonds at that sort of premium should be institutionalized.
The first and most obvious thing to be said about all of this is: If you are one of the many analysts seduced by the idea that the Trump administration would be in some way friendly towards the “working class” or would in some way advance the concept of antitrust enforcement in the public good, you are a damn idiot. https://www.hamiltonnolan.com/p/you-cant-rebrand-a-class-war
Did you miss the 2nd Carter administration these past 4 years
I am not concerned as tRump promised to lower grocery prices and he always lives up to his promises.
“tRump”. lol Better go put on another surgical mask.
I prefer his formal name: F**kFace von Clownstick.
A frontal lobotomy has been definitively proven to cure TDS. I suggest you get one.
More rate cuts fixes this.
(excerpt from Chapter three of “Erdognomics”)
Are the producers’ margins increasing or are they getting hit with higher input prices, too?
The minimum wage and union wage for shelf stockers over values their skill set. This is a job for Tesla robots.
Ooops. Must be the added social costs of butt plugs to prevent bovine farts causing anthropomorphic global warming to offset C02 spewing Lear Jet flying Italian Ivy League Stanford vigilantes into Zen trips before offing big pharma CEOs for climate justice and Greta. . .
LMFAO!!!!!!!! Although I cannot define the meaning of Anthropomorphic but i get your point
It means ‘having human characteristics’… Like when you put googley eyes and a hat on a tennis ball.
Hadn’t heard it in this context, and it feels like a bit of a stretch, but it works.
Regarding food price increases. Biden regime has done everything in its power to target Family Farms. Making producing food for the Table more expensive.
This includes the concerted effort by Blue States going after irrigation water access, using health scares such as Bird flu to destroy Poultry flocks. Dairy, beef and pork farmers getting hit with new regulations.
With RFK jr. coming on board the plight of Family Farms will be eased. He is fully on board with the Organic movement and intends to further that direction. Family Farms is where they have an edge in Organic produce.
Trump letting Oil flow will help fueling those tractors and Farm implements so heavily reliant upon mechanization to produce more food. Transportation will also benefit getting lower operating costs from lower fuel costs.
These things will be happening and this Spring planting begins the process of getting food inflation under control.
Doug Burgum to head Dept. of Interior will bring huge change for Rural America.
this just really sounds like wishful thinking without any hard number. Trump will magically make everything amazing
Stopping the endless bleeding is always positive. Our patient is near death
He bled us for 6.7 trillion last time. He’d promised to balance the budget. No such promises this time, soI’m betting he gets us for 8 trillion or more this time. The bleeding stops when the patient bleeds out, so you may end up being correct.
I really do not understand a person like yourself. At face value you come off as intelligent.
Perhaps it is the woke mind virus interacting with TDS syndrome and that combination alters the DNA you were born with. Ends up affecting the ability to reason out a solution to what ails this country.
Crops have to be planted, tended, harvested and distributed. Their is nothing magical about that. It does however require energy, profit motive to Farm, and a guiding hand called the farmer to make that occur.
Many factors go into producing a saleable crop. Some things such as Weather are beyond the control of a Human being, but there are also many factors that applying some brainpower to can affect outcome in a positive manner.
I worked for a family farm for many years. They weren’t too thrilled with the yields and general profitability of growing organic.
Another point is the brokers are the ones that actually control the price, and since produce is perishable, growers can’t really hold out on them. The price is set by the parasite.
I have noticed that there really haven’t been any sales worthy of the name at the grocery store in the last month.
Price Chopper. Lmao!
Amidst the increasing consumer inflation indicators … the 3-month US Treasury minus the 10 year US Note uninverted today after a record 770+ plus days with the deepest inversion since 1980-82. President Trump’s ability to control the freedom caucus for stimulatory further deficit spending will be interesting.
He’s not going to get 15% corporate rate. Maybe 18. I’d rather him lower income taxes myself.
What would be the Downside and the Upside of the current Fed rate remaining as it is for the next X years (say 5 years?):?
Video of the best explanation of food inflation, by Father Guido Sarducci.
https://www.youtube.com/watch?v=dNOCKPxQ9kI
A 10-20% market correction will dramatically reduce inflation. Until then, it’s to the moon.
Think the rich will stop eating as much food (which Mish reports is the primary reason the PPI was so high)?
A market correction will do nothing for inflation, … same as in 2022.
A recession with rising unemployment and declining GDP might do something for inflation, or it might not. Stagflation or an inflationary recession are both realistic scenarios.
the only way for a “dramatic” reduction in inflation at this point is mass job losses, which doesnt seem likely to me any time soon
Mish’s charts on rising unemployment show that mass job losses are entirely possible, maybe even highly probable, within the next 6-12 months.
I’m sure it’s only “transitory”. Good grief. Why are we cutting rates again ? Such fools.
Rinse & Repeat.
Although we need a few new conspiracy theories to replace some old favorites:
Right-wing conspiracy theories are having a bad day
Awesome. We’ll always remember 12/12 LOL
Thanks – now Bezo doesn’t have to deliver it to my door.
Because the debt junkie is getting sick.
“Rose Faster Than Expected” – only if you haven’t been paying attention to reality.
The cynic in me thinks that inflation was being artificially suppressed into the election and now it is resuming its unsuppressed course.
Was that done to get the current VP Kamala Harris elected to president?
Fed should absolutely NOT cut rates in December.
Maybe a .25 cut in January depending on EOY numbers.
No cut in March if PPI and OER show no signs of plateau or reversing.
If nothing else the Fed needs to tread water for a bit until we see how the trade talks and tariffs bit pans out for a bit.
Cutting rates and juicing the money supply is going to be a disaster worse than GFC.
But then again that may be the plan. Lots of egos and politics being played with OPM and consumers at large.
Agree, but they won’t want to wrong-foot the market next week by not cutting. I could the statement and presser setting a hawkish tone regarding future cuts, though.
That’s ok. Nobody eats.
“Nobody ever goes there anymore — it’s too crowded.” – Yogi
Stock up – before the prices increase more. – mid/late 70s.