The Producer Price Index (PPI) was up 0.1% month over month and 2.0% year over year, the latter down from 2.4%. The Econoday parrot was not happy.
Inflation data, wherever one looks, are weak. Producer prices edged only 0.1 percent higher in June as did the less food & energy reading with year-on-year rates moving down noticeably, to 2.0 for a 4 tenths decline overall and to 1.9 percent for the core and a 2 tenths dip. The less food, energy and trade services reading did rise 0.2 percent but this on-year rate still slipped 1 tenth to 2.0 percent.
Service prices are in fact the best news in the report though the overall gain is only 0.2 percent and the reading for trade services, which tracks the retail and wholesale sectors, actually fell 0.2 percent. Food prices are a plus, rising 0.6 percent following May’s 0.2 percent dip, but were offset by energy prices which fell 0.5 percent for a second straight decline. Prices for finished services managed only a 0.1 percent gain with this year-on-year rate, which offers a telling indication on demand for legal and health services, at only 1.7 percent.
However GDP or employment is moving, inflation is a fundamental indicator for general demand. These results will not move up expectations for tomorrow’s consumer price report where similar weakness is the unfortunate expectation.
PPI Final Demand
Dear Econoday Parrot
- Dear Econoday parrot, are you personally happy when the things you buy go up in prices so you get less for your money?
- Is it unfortunate when clothes, food, and electronics go down in price?
- Do you not see inflation in asset prices?
- Is low inflation a “fundamental indicator” of anything other than your inability to measure it?
Dear Econoday parrot, please get a grip on reality. Inflation has hollowed out the middle class whose wages have not kept up with Fed-sponsored inflation.
The beneficiaries of inflation have been the banks, the already wealthy, and the asset holders to the detriment of everyone else.
Mike “Mish” Shedlock
Ask any business owner what the real inflation numbers are and it’s closer to 8%
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There is no way out of the massive debt that cities, states and the federal government have issued.
They all dream of Argentina or Zimbabwe inflation rates where debt and pensions are worth pennies on the dollar.
That is so much easier than cutting spending and stop buying votes with other people’s money.
No one can be blamed for inflation. It just happens.
No matter if most of the population suffers.
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The way out is the same as the way in, more debt…. no, wait….
Eventually though it turn into a command economy, basically rationing , as long as the prices and population can be legislated over to the necessary degree.
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“No one could’ve seen this coming. ”
“It’s for the children! We didn’t do this for ourselves…. ”
“It was already baked in when we got here”
“It was the only way to stop ________. ”
Fill in blank : war, poverty, abuse, trafficking, etc.
“It’s a one shot thing. 100 year flood. Perfect storm. Won’t happen again, no sir!”
“The damages are contained.”
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Agreed. It’s time to audit the FederAl Reserve. Indict its all its crooks and clientele making money fraudulently including its current past Fed presidents Yellan, Bernard and bubble head greenspud greenspan. Void payment of its ” illegal onerous debts and interest” Then dissolve and end the federal reserve. Return to the Gold backed dollar so we have at least one asset to base the value of our dollar and every other Assett group or base.
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Further there was another article on the Brookings Institute site that spoke of a Study done recently by Brookings with low income people receiving Medicade. Apparantly their monthly income being approximately about $1000.00 per month at present are getting $300.00 per month taken out of their checks to pay their FiCA contribution. Those interviewed would rather see that contribution lessen rather than have the Medicade benifits!!!
I thought that interesting.
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Very clean, simple response to a lot of mis-guided, mis-educated, “experts”. Who pays these buffoons, while the silent majority continue to work and to descend (DOWN) the economic ladder ?
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During the recession (the most recent 8-10years, since there was no recovery in real terms), my company went through a cost cutting binge like many others. Of course, laying off staff was part of that process.
Before we did that, we looked at a lot of the external “experts” that we had implicitly “on staff”. The clueless wonders at the Brookings Institute (actually all the useless “think tanks” in DC who’s publications we wasted money on). Forecasters and pundits ranging from Moodys (Econoday as well as their useless credit ratings). A lot of the compliance lawyers and consultants and accounting experts — who saved us some money in one department budget while adding equal or higher costs at the company level.
We kept a few publications and a few consultants — but we tried to measure their total real costs versus their total benefits. Most were costing us money on net.
In theory, firms like Econoday or Brookings Institute could add value. But in practice they do not.
PS — anyone who believes producer costs are only climbing 2% per year, we have bridges and elixers and swampland to sell you.
2% is so out of touch with reality that its not even worth arguing about. It might be the correct algebra for the formula BLS uses, but it has nothing to do with producer costs that it is supposed to measure.
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By definition the BLS will always calculate low inflation. Whenever the price of something rises, they assume people stop buying it and purchase a cheaper alternative. If beef rises 10% and chicken rises 1%, everyone switches to chicken.
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I always threw that crap in the garbage so as not to contaminate my desk.
I don’t produce anything, so totally anecdotal, but I see little change in prices at retail, and definitely see the commodity indexes are in the dumper.
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From my life,s experience (born in 25) lived on 4 continents ,stability is the most preferred , inflation/deflation are the most dangerous, be careful what you wish for!
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Except where is stability?
That is to say are prices inflated/deflated/just right now.
Volatility, rapid changes in prices, show that there is instability, but they are not necessarily the cause of it, and might be interpreted as would an engine dial, where too much or too little fuel are only the most obvious culprits.
Where someone cannot afford something necessary, it makes little difference what he wishes for ( higher wages or lower prices), but he will search for that result.
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They deliberately understate the CPI. I don’t know why people tolerate these deliberate lies, its not incompetence its malevolence. What puzzles me is why the bond market doesn’t react to the bogus figures, yields should be way up as a way of calling out the emperor with no clothes.
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It’s because they own the bond market too.
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For those of you who don’t have to pay for education, health care, or housing, your inflation rate is < 2%/yr. For everyone else, it's closer to 8%.
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Bring on some good deflation. Shoppers can buy more with their dollars.
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“The beneficiaries of inflation have been the banks, the already wealthy, and the asset holders to the detriment of everyone else.”
…
Class … DISMISSED …
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They always are……… maybe because the system is rigged and they rig it all in their favor – even through inflation…..
Econoday Parrot wanna cracker?
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I don’t know if they actually believe it themselves, but to these people, Inflation = Growth … I usually ask them if they do the family shopping, and the answer is usually “No.” The rest of us witness inflation or shrinkflation and wonder what planet these folks are from, because we know we aren’t getting more for our stagnant wages.
BTW, this gem from the UK … When the public sector faces increasing prices, they pass it along in spades (Why are rail prices going up at RPI instead of CPI):
http://www.thisismoney.co.uk/money/bills/article-4682540/Why-train-fares-rise-RPI-not-CPI-inflation.html
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