Producer Price Index for September-2021

 

As you know by now, it was ugly for consumer's future prospects of inflation. Yes, a lot of this will get passed on to us. It is a sellers market, especially in food and energy. Here is the full report from the BLS.

From the horse's mouth...

The Producer Price Index for final demand increased 0.5 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.7 percent in August and 1.0 percent in July. (See table A.) On an unadjusted basis, the final demand index rose 8.6 percent for the 12 months ended in September, the largest advance since 12-month data were first calculated in November 2010.

Nearly 80 percent of the September increase in the index for final demand can be traced to a 1.3- percent rise in prices for final demand goods. The index for final demand services moved up 0.2 percent. 

Prices for final demand less foods, energy, and trade services moved up 0.1 percent in September after increasing 0.3 percent in August. For the 12 months ended in September, the index for final demand less foods, energy, and trade services rose 5.9 percent.

For those thinking the FED might raise rates, the highlighted number above, seems to indicate otherwise. The FED always looks at things other than food and energy to gauge the economy. 

However, note that trade services is listed in the highlighted number. The final demand excluding food and energy rose 8.3% YOY and up 0.5% unadjusted from August or 0.6% when adjusted. 

About a third of the way down the full report is final demand goods and here is a summary...

I have highlighted a few areas that are above the monthly and annual numbers. Some areas look better on the annual, but the monthly looks terrible in my opinion, and suggestive of continued inflation going forward. Energy is almost reflected in real time as we all know the gasoline prices raise immediately, so yes gasoline and energy are "volatile".

Current forecast for core PCE is 0.22% for September and 3.7% YOY. That report is due October the 29th. I place the numbers here to track any forecast changes. 

So it appears this transitory phase could last into May of 2022. But then I had previously thought the supply chain issues would be resolved and groceries prices moderating by this PAST March. 

What do I know?