Michael Lukianoff’s Post

Consumer prices rose 0.3 percent on the month and 3.4 percent on the year and rose 0.3 and 3.6 percent when excluding food and energy.

The December PPI report told a much different story than last week’s CPI release as producer prices signaled deflation at the wholesale level for the third consecutive month. Whereas consumer prices had been warmer than expected in December, producer prices were much cooler. HilltopSecurities Senior Portfolio Manager and Managing Director Scott McIntyre, CFA discusses this in our newest commentary: https://lnkd.in/gv2ji5xm #HilltopSecurities #Economy #BondYields

Czech consumer prices unexpectedly dropped by 0.4% in December on a fall in food costs, easing year-on-year inflation to 6.9%, the lowest since September and keeping the door open to a series of interest rate cuts by the central bank. #inflation #economy #consumerprices #energy #income

Week 20 - 5 Things to Know in Investing This Week Point 3) The PPI Comes in Hot: The PPI is the producer price index, and is a measure of wholesale prices. In general, higher producer prices make their way into higher consumer prices. The April PPI was up 0.5% from last month which was much higher than the 0.3% expected. It also reversed the direction of last month’s decline. The yearly PPI was up 2.2%, also an increase from recent levels (chart below). The Core PPI, which excludes food and energy, was up 0.5% vs last month which was well above the 0.2% expected. Core was up 2.4% vs last year, also an increase from last month. Not only has inflation not subsided, it’s increasing.

Week 20 - 5 Things to Know in Investing This Week Point 3) The PPI Comes in Hot: The PPI is the producer price index, and is a measure of wholesale prices. In general, higher producer prices make their way into higher consumer prices. The April PPI was up 0.5% from last month which was much higher than the 0.3% expected. It also reversed the direction of last month’s decline. The yearly PPI was up 2.2%, also an increase from recent levels (chart below). The Core PPI, which excludes food and energy, was up 0.5% vs last month which was well above the 0.2% expected. Core was up 2.4% vs last year, also an increase from last month. Not only has inflation not subsided, it’s increasing.

Stats NZ has announced that they'll be expanding the range of prices that they publish on a monthly basis, in the absence of a full monthly CPI. I've written about this previously, so I did a quick update of what the current suite of monthly price data looks like. The new additions are welcome, accounting for a relatively large share of the variation in the CPI. But I still think that the benefits to policymakers of a monthly CPI are fairly small. And there's an extra wrinkle on the costs side: it's growing harder to get businesses to respond to surveys on a quarterly basis; a monthly CPI would triple the administrative burden on them.

WPI vs CPI – Key differences WPI calculates the average price change at a wholesale level, whereas the CPI calculates the difference in the prices at a retail level. While WPI is concerned with the goods that the trading houses trade, CPI is concerned with the goods that the consumers purchase. WPI only measures goods, while the CPI measures goods and services. It measures inflation in the first stage CPI measures inflation in the final stage. WPI is the value a retailer/distributor pays. CPI is the price a consumer pays WPI articles cover fuel, energy, and manufacturing products, CPI articles cover education, transportation, communications, recreation, clothing, housing, and healthcare Only a few countries use the wholesale index, whereas more than 157 countries primarily use the consumer index. #Economy

PPI Stuck well above the 2% metric desired by the FOMC Wholesale prices moved 0.5% up in April, with core PPI rose 0.4% or 3.1% YoY WAY above analyst estimates Raw materials, services, oil, and goods were all up on the month. PPI does a great job at estimating the supply-side of inflation. If PPI moves up big time, you can be assured that CPI will follow soon after. In recent months, the slow in inflation has been largely attributed to the supply chain returning to normalcy, and costs leveling out for businesses. It appears that trend could be coming to an end. #goodluckhavefunyall #ppi #inflation #oil

Recent increasing rate is only the manipulations of shipping lines on blank sailings, fears of strike in ports and the serious drought in Panama Canal. Given that companies still plan to build up the inventory for the coming sales in Thanksgiving, Christmas and New Years Eves, shipping lines used the supply and demand tactic to keep up the rates. But eventually the rates will turn around and go down again because the consumptions haven’t actually come back normal yet.

The recently released Consumer Price Index (CPI) has shown an upward trend last month, while the Producer Price Index (PPI), on the other hand, has shown a downward trend. Generally, PPI is considered a leading indicator of CPI. The PPI related to goods is decreasing, whereas the PPI related to services is increasing. This suggests that the prices of goods will decrease as the producer prices of goods fall, which will eventually reflect in the CPI. However, the prices related to services are not expected to decrease. Looking at this month's CPI, the index related to goods is not particularly high, but the prices in the service sector, including rent, housing costs, and dining out, still remain high. This is due to costs associated with services, like labor costs, not decreasing easily. One reason for this phenomenon is the still low unemployment rate and the lack of housing supply, which is preventing housing costs from falling.