The seasonally adjusted Producer Price Index (PPI) for Total Final Demand unexpectedly increased by 0.3% in November as prices for finished wholesale goods fell by 0.1%, while margins of final services providers were 0.5% higher.
The Producer Price Index, or wholesale inflation, did not change, or zero for August 2011 finished goods. Food trumped gas as foods increased 1.1% while gas dropped -1.0%. Core PPI, which is finished goods minus food and energy, increased 0.1% and is the 9th month in a row for an increase. While this is wholesale, tire shoppers beware, 20% of core's increase was tires, up 1.4% from July.
The Producer Price Index, or wholesale inflation, increased 0.2% in July 2011 for finished goods. Core PPI, which is finished goods minus food and energy, jumped 0.4% and is the 8th month in a row for an increase. Smokers beware, 25% of core's 0.4% jump was tobacco products. Core PPI is a Federal Reserve watch number for signs of future inflation.
This morning the Bureau of Labor Statistics reported that Producer Prices declined (-1.9%) in December. Annual PPI for 2008 was (-1.2%), the first decline since 1950.
In the last 5 months, producer prices have declined (-8.2%). This far eclipses the dot.com decline of (-3.2%) in 2001-2, and the post-WW2 decline of (-6.2%) in 1949-50.
We are witnessing the biggest price collapse since the Great Depression.
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