Wholesale prices show continued weakness, especially services.
The BLS reports PPI for Final Demand Declines 0.1% in March. Services and goods both decreased by 0.1%. Y
Year-over-year prices are up by 2.3% but that is based on easy comparisons and it also includes a big jump in oil prices which barely filtered through.
BLS Points
- The Producer Price Index for final demand declined 0.1 percent in March, seasonally adjusted. Final demand prices advanced 0.3 percent in February and 0.6 percent in January.
- In March 2017, three-fourths of the decrease in the final demand index is attributable to prices for final demand services, which fell 0.1 percent. The index for final demand goods also inched down 0.1 percent.
- Prices for final demand less foods, energy, and trade services edged up 0.1 percent in March, the tenth straight advance. For the 12 months ended in March, the index for final demand less foods, energy, and trade services climbed 1.7 percent
PPI Final Demand
No Traction
For at least 13 months, the PPI services index has been flirting with one percent year-over-year price increases. There is no price traction on the services front.
In January, PPI Goods spiked on account of rising energy prices. Year-over-year comparisons will be easy to beat, but month-over-month is more likely to stabilize.
Helpful BLS Hint
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Mike “Mish” Shedlock
Sounds like the Fed will need to cut interest rates. Same deal in Canada where there’s significant price deflation, especially as the housing bubble pops and demand disappears.
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The price deflation is caused by competition and margins going down. This is not a reason to cut rates or even keep them where they are. Being in retail, we see everything from the bottom up and our costs to run the business have exploded in the past 3 years. When I see their inflation numbers, I know they are cooked and completely false. All we have to do is read the news and see housing prices exploding, rents exploding, cost of goods going up, shipping costs now exceeding 10% of shipping value, etc. They need to keep rates down to keep the Ponzi going,so they make up the numbers as they go along. Those of us that live and work in the real world know the truth. Of course, they never want to talk about insurance costs including health insurance when they discuss these numbers. They can’t include the drug industry, because no one knows what the real costs are, yet many of us get smacked in the face with these insane prices. Real inflation is closer to 6-8% and that is being generous. If you tell the lie enough times, then everyone believes it……………..
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The price of disposable, low quality plastic cr-p at the import docks are down 0.1%/month for PRODUCERS. As usual, so-called economists want to tell us another above 2% print yoy “doesn’t count” because that would destroy their ridiculous “no inflation” propaganda.
Meanwhile, the cost of Obamacare is up 30% (2.5% per month) which comes out of the employers pocket if not the consumer’s pocket (sometimes shared).
Property taxes are up 5-7%. Rents are up 5-7%. Food and energy costs (which the economist con-artists only count in months when they go down) are up this month…. so the apologists are ignoring these.
In short, inflation in the real world is running 4-5% easily, perhaps more like 5-6% in many cases. But as per usual, if you are paid six figures to lie about costs, you will stick with the bullsh!t story that buying Treasuries that pay less than inflation (even less after you pay taxes on them) are somehow a great deal….. well they are if you are selling them!!
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Bankers continue to oppress the people, especially their elders. Inflation is bankers using diverse weights and measures to confiscate stuff from people.
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trump has officially switched parties,dems gonna con him into the largest tax increase….. well, ever ie his tax reform means huge increase to fund fresh combat ops.in Syria.iraq and NK
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Everyone’s waiting for the next new phone. Or they’re still paying off the one they bought last year. The FAA and media are making people afraid to buy personal drones (and who wants to take drone footage of sitting on the couch?). Trump isn’t “after” their guns. Not enough 4K content to justify a new TV. Still paying off the 7 year car loan.
Finally, their coworkers are retiring and they’re starting to realize they don’t have any savings, so even though they want to retire too, they can’t.
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