Fed Gets More Ammo for Rate Hikes

Jon Blogosphere, Economy, Market Commentary

Producer Price Index rises most in six years.
The Producer Price Index for final demand – which tracks prices received for goods, services, and construction from the perspective of the seller, as opposed to a measure like CPI which tracks prices paid from the perspective of the buyer – jumped 0.44% seasonally adjusted in November from October, after having risen 0.44% in October and also 0.44% in September, the Bureau of Labor Statistics reported today. After those three sharp monthly increases in a row, the index has now risen 3.1% year-over-year (not seasonally adjusted), the fastest increase since January 2012.

In the chart above, note the impact of the collapse of energy prices in 2015 and early 2016, which was just a temporary blip on the longer-term inflation scale.

This post was published at Wolf Street on Dec 12, 2017.