Hotter November Core Producer Price Inflation has Market Nervous About CPI

US Producer price inflation for November revived concerns about next week’s Consumer Price Index not being as friendly as had been expected. In turn that brings back to the fore the Fed’s monetary policy path. The PPI rose 0.3% month-over-month in November (consensus +0.2%) following an upwardly revised 0.3% increase (from 0.2%) in October. Core PPI rose 0.4% month-over-month (consensus +0.2%) following an upwardly revised 0.1% increase (from 0.0%) in October.

On a year-over-year basis, the index for final demand was up 7.4%, versus 8.1% in October, and the core index was up 6.2%, versus 6.8% in October.

Inflation

The Federal Reserve has been on an aggressive path to reducing historically high U.S. inflation, we are a long way from the Central Bank transitory mantra.

November 2022 PPI

US June PPI Highlights.

  • US PPI Final Demand (M/M) Nov: 0.3% (est 0.2%; prev 0.2%)
  • US PPI Core (M/M) Nov: 0.4% (est 0.2%; prev 0.0%)
  • US PPI Final Demand (Y/Y) Nov: 7.4% (est 7.2%; prev 8.0%)
  • US PPI Core (Y/Y) Nov: 6.2% (est 5.9%; prev 6.7%)

Where the price rises were:

  • The index for final demand goods increased 0.1% month-over-month, paced by a 3.3% increase in prices for final demand foods.
  • The index for final demand services jumped 0.4% month-over-month, led by a 0.4% increase in prices for final demand services less trade, transportation, and warehousing.
  • Prices for processed goods for intermediate demand moved down 0.9% month-over-month, which was the fifth consecutive decline.
  • Prices for unprocessed goods for intermediate demand fell 3.2% month-over-month, driven by a 7.8% decline in prices for unprocessed energy materials.

US PPI

United States Consumer Price Index (CPI)
US PPI Annually
United States Producer Price Inflation MoM
US PPI Monthly

US Core PPI

 

United States Producer Prices Final Demand Less Foods and Energy YoY
US Core PPI Inflation Annually
United States Producer Prices Final Demand Less Foods and Energy MoM
US Core PPI Inflation Monthly

PPI was released ahead of consumer price data for November. October CPI offered important clues on how aggressive the Fed will be in hiking interest rates. The CPI increased 0.4% in October as it did in September, and increased 7.7% in October from a year ago, the smallest 12-month increase since January 2022. CPI y/y was down from 8.2% in September.

Stocks Soar, Yields and Dollar Drop as US Core Inflation Eased off 40-Year Highs in October to 6.3% from 6.6%

Source BLS

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