Producer prices flat, commodities decline, shelter is sole inflationary pressure
Producer prices flat, commodities decline, confirming shelter as sole inflationary pressure
– by New Deal democrat
Once again producer prices confirmed that the only significant problem in inflation is shelter.
In December commodity prices declined -1.3%. For finished goods they declined -1.2%. Even producer prices for services were unchanged:
On a YoY basis, commodity prices are down -3.2%, finished goods prices down -0.2%, and producer prices for services up 1.8%:
Needless to say, none of these suggest any producer inflation pressures in the pipeline at all. Here is what final goods producer prices (blue), headline consumer prices (red), and consumer prices excluding shelter (gold) look like since the energy inflection point of June 2022:
Producer prices are up only 1.4% since then, and CPI less shelter up 1.9%, vs. headline consumer prices up 4.8%.
The only real inflationary issue in the US economy is shelter as measured by the CPI. Paradoxically, high interest rates, which depress homebuilding, do not help this issue at all.
September producer prices confirm economic tailwind has ended, Angry Bear, by New Deal democrat
once again, these FRED graphs are quite different than what’s indicated by the report that the BLS put out…this is the news release i work off of: http://www.bls.gov/news.release/ppi.nr0.htm
and that has links to three long form tables at the bottom with considerably more detail…
the detailed monthly report runs 350 pages, which i’ve always found too cumbersome: https://www.bls.gov/ppi/detailed-report/ppi-detailed-report-december-2023.pdf
i went over to FRED to try to find the graphs that match the actual report, but with hundreds of PPI graphs over there, that looked like too much of a chore…the first one they pitch is the one NDD used above, which is not seasonally adjusted, which is probably why he’s got different figures than others who reported on this..
btw, i don’t do a macro oriented report on this, but instead focus on relatable price indices, such as the wholesale price index for industrial chemicals, the change in margins for major household appliances retailers, or refinery prices for No2 diesel fuel…what the numbers mean is beyond me..