“Disinflation” Honeymoon is over! Wholesale inflation posts largest increase in 14 months as producer price index jumped .7% (economists predicted .4%) in August. The PPI report captures what companies pay for supplies, with these costs usually passed down to consumers. PPI + yesterday’s CPI = Inflation GROWING!

The Consumer Price Index (CPI) jumped by 0.63% in August from July, the biggest month-to-month increase since June 2022. Annualized, this amounts to a red-hot 7.8%.

This jump comes despite the still ongoing ridiculous monthly adjustment to the health insurance CPI that caused it to collapse by 33.6% year-over-year. The September CPI, to be released in October, will be the last month with that adjustment; with the October CPI, to be released in November, it will flip, which will add upward momentum to the CPI readings. CPI, core CPI, and core services CPI have been understated significantly since October last year, when the monthly health insurance adjustment started, one of the biggest data distortions coming out of the pandemic (more in a moment).