As the economy slows, so has producer price growth
As the economy slows, so has producer price growth
– by New Deal democrat
Consumer prices for September will be released tomorrow. This morning the upstream producer prices were released. Total PPI rose by 0.4%, after two straight months of decline; but excluding those and December 2021, the lowest monthly increase since November 2020. Here are the monthly changes compared with CPI:
YoY producer prices increased at the lowest rate in a little over a year:
Core PPI increased by 0.2% (blue in the graph below), which was the lowest reading since December 2020, and in line with historical pre-pandemic readings, in contrast to the continued elevation in core CPI (gold):
PPI’s primary housing component is residential construction materials. Here are the absolute values in both flavors of that reading, normed to 100 as of January of this year:
Note that both have declined in the last few months, with construction materials down -2.6% since January, and goods inputs essentially flat since March. Both are still very elevated, up over 33% since the end of 2020. But at least they are o longer rising.
With a slower economy, as expected producer prices are easing. Tomorrow we will find out just how much Owners’ Equivalent Rent is distorting consumer prices to the upside.
“PPI, without the lagging phantom of Owners Equivalent Rent, declines in August, decelerates YoY,” Angry Bear
two-thirds of the PPI for final demand is for services, including such line items as the monthly change in margins for different kinds of retailers and wholesalers, to advertising and financing…here’s the report summary from the BLS: https://www.bls.gov/news.release/ppi.nr0.htm
like most BLS releases, it’s very readable and refers you to detailed tables linked at the end of the report..
for instance: “Over a quarter of the September increase in the index for final demand services can
and
New Data Likely to Show Stubbornly Rising US Prices
NY Times – Oct 13