This is not looking good at all …
Core PPI, which excludes energy costs, spiked by 6.1% annualized in April from March, seasonally adjusted, the biggest increase since July, also driven by the spike in services and made worse by the downward revision of the prior month.… pic.twitter.com/R8q0D3BNAr
— Wall Street Mav (@WallStreetMav) May 14, 2024
Recent data on Core Producer Price Index (PPI) reveals a troubling trend, with a staggering 6.1% annualized spike in April compared to March, marking the most significant increase since July. This surge, driven by soaring services costs and exacerbated by downward revisions from previous months, paints a grim picture of escalating inflationary pressures.
Furthermore, the 3-month rate, standing at 3.2%, signals the worst performance since September 2022, indicating a persistent and concerning trend. The rise in final demand services by 0.6% in April, the largest since July 2023, adds to the growing apprehension regarding the trajectory of inflation.
With a typical 2-3 month lag between PPI and Consumer Price Index (CPI), these alarming figures suggest that the reacceleration of inflation may not be behind us yet, raising fears of further economic instability.
Despite these worrying signs, market reactions appear subdued, reflecting a concerning level of complacency. Moreover, the assertion that the Federal Reserve has inflation under control seems increasingly untenable, particularly in light of escalating government deficit spending, which continues at record levels.
As the debate over potential rate cuts persists, many are left questioning the efficacy of such measures in the face of mounting inflationary pressures. With projections indicating prolonged deficit spending for decades to come, the urgency to address these economic challenges has never been more apparent.
PPI comes in quite a bit hotter than expected at core and headline, but markets seem to want to shrug that off for now.
Final demand services rose by 0.6% in April. This was the largest rise for final demand services since July of 2023 when the reading was 0.8%
There's about a… pic.twitter.com/MmhGa6Bg0H
— Markets & Mayhem (@Mayhem4Markets) May 14, 2024
#wheat has a 45-year parabolic base, and has backtested that parabolic base yet once again. and has now broken back up from a double bottom.#gold is telling us that the 2nd inflationary wave is coming. So is this chart. And when Fed goes QE-infinity, this chart goes ballistic.… pic.twitter.com/eHBOue3pqW
— Graddhy – Commodities TA+Cycles (@graddhybpc) May 14, 2024
The Fed is, at the moment, losing its fight with inflation with deficit spending continuing at record non-recession, peacetime levels. And projections indicate no end in sight for this kind of spending, for decades. Source: CBO pic.twitter.com/FvV3iD32Xu
— David Sommers (@dgsommersmkts) May 14, 2024
Wholesale PPI Inflation comes in hot. Rick Santelli breaks it down.
https://twitter.com/leadlagreport/status/1790385321479475604
Meme stocks vs. inflation expectations pic.twitter.com/hLDh0zr8w2
— Otavio (Tavi) Costa (@TaviCosta) May 14, 2024