For a long time the narrative has been goods inflation is now under control, mission accomplished and services is the only dragon left to slay. Now we are starting to see rising consumer spending on goods again, leading to hotter inflation there. Historically inflation episodes often come in waves and pulses, it’s not short and dealt with quickly. Interesting to see what will happen this time if Fed can succeed in delivering 2% quickly or sticky 3%-4% for a protracted period.
https://www.cnbc.com/2023/10/11/ppi-september2023-.html
- The producer price index increased 0.5% for September, against the Dow Jones estimate for a 0.3% rise.
- Excluding food and energy, core PPI was up 0.3%, versus the forecast for 0.2%.
- Inflation pressures came primarily from final demand goods, which surged 0.9% on the month, while services increased 0.3%.
A measure of wholesale prices rose more than expected in September, indicating simmering inflation pressures for the U.S. economy.
The producer price index, which measures costs for finished goods that producers pay, increased 0.5% for the month, against the Dow Jones estimate for a 0.3% rise, the Labor Department reported Wednesday. That was less than the 0.7% increase in August.
Excluding food and energy, the core PPI was up 0.3%, versus the forecast for 0.2%. Excluding food, energy and trade services, the index rose 0.2%, in line with the estimate.
Markets showed only a mild reaction to the PPI release, with stock futures off slightly and Treasury yields off their lows though still negative on most longer-duration issues.
h/t absoluteunitVolcker