The Core PPI and PPI (Producer Price Index) were released today showing positive news. The PPI is the change in the price of finished goods and services sold by producers and Core PPI is PPI excluding food and energy. Core/PPI is a leading indicator of inflation and can have ripple effects on prices of goods and consumer spending.
| Category | Forecast | Actual |
|---|---|---|
| PPI | 0.6% | 0.8% |
Core PPI | 0.2% | 0.3% |
So what does this data tell us. Well it says that Food and energy are 0.5% of the increase and the cost of brining food and energy to market have gone up significantly, which will then have to be passed on to the consumer. This can be a troublesome sign as food and energy are not discretionary items, they are "must have" for survival. The other 0.3%, depending on what it is, is less concerning because consumers can just choose to do without. This is the largest jump in PPI since February of this year where the increase was 1.4%. We will have to keep an eye on the coming numbers to see if a trend begins from this.
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