Economy

November 15, 2022

Markets Refuel As Producer Prices Cool

Last week’s cooler-than-expected Consumer Price Index (CPI) print sparked a strong relief rally in bonds and risk assets. And today, producer prices followed suit.

October’s wholesale prices increased less than expected, rising 0.2% MoM vs. the 0.4% expected. On a YoY basis, it decelerated from 8.4% to 8.0%.

Driving this month’s data was a strong rebound in energy prices, which pushed up final demand prices for goods by 0.6%. Meanwhile, services inflation fell 0.1%, its first decline since November 2020. That helped drive the deceleration despite a 2.7% increase in energy and a 0.5% increase in food costs.

As the YoY % change chart from TradingEconomics shows, this is the fourth straight month of deceleration in producer prices. 👍

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General Mills Pushed Too Far

December 20, 2023

Ultimately, prices remain elevated above where the Fed wants them. But the continual improvement in wholesale prices is a positive sign for the “inflation has peaked” camp. Now we’ll have to see if this progress can continue into year-end. Risk assets certainly hope they will…

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