Since these good folks are still playing their Soviet games, lying to our faces about stats constantly, it is quite impossible to take anything seriously, as there are always major corrections in just days. Added to this fact, is that the numbers just out are not even including the things that people actually buy, like food and gas.
In May, the Producer Price Index (PPI), which measures the average change over time in the selling prices received by domestic producers for their output, declined by 0.2%, according to the Labor Department’s Bureau of Labor Statistics. This decrease was unexpected and marks a reversal from the 0.5% increase observed in April, contrasting with the anticipated 0.1% rise. This indicator serves as a measure of wholesale prices, offering insight into the inflationary pressures within the economy.
U.S. wholesale prices unexpectedly fell 0.2% in May https://t.co/WhNChNqDR0
— #TuckFrump (@realTuckFrumper) June 13, 2024
The core PPI, which excludes volatile items like food, energy, and trade services, remained unchanged for the month, defying expectations of a 0.3% increase. On a yearly basis, the all-items PPI increased by 2.2%. Following this report, stock market futures experienced modest gains while Treasury yields declined. As trading continued, the Dow Jones Industrial Average fell by approximately 260 points, whereas the S&P 500 and Nasdaq showed minimal changes.
The easing inflation suggested by the PPI data has fueled market optimism that the Federal Reserve might lower interest rates later in the year. Despite the Fed announcing only one anticipated rate cut of 0.25 percentage points this year, many continue to hope for a more aggressive rate reduction.
Business input costs eased last month. The Producer Price Index (PPI) fell 0.2% in May, after rising 0.5% in April. Core PPI (ex food/energy) was flat M/M, coming in much lower than expected (+0.3%). PPI inflation increased 2.2% over the 12 months. pic.twitter.com/Qtkb40Bypm
— Cetera Investment Management (@ceteraIM) June 13, 2024
The report also highlighted specific sectors: prices for final demand goods fell by 0.8%, the largest monthly decrease since October of the previous year. Within this category, energy prices dropped significantly by 4.8%, and food prices slightly decreased by 0.1%. Conversely, the retail margins for fuels and lubricants soared by 12.2%, although this increase was partially offset by a steep 4.3% decline in airline passenger services prices.
Additionally, the Federal Reserve noted “modest further progress” in controlling inflation, maintaining its benchmark borrowing rate between 5.25% and 5.5% since July of the previous year. The central bank is looking for more concrete signs that inflation is consistently moving towards its 2% target.
Headline PPI Final Demand declined 0.25% M-M in May. Core PPI inflation was 0%.
Meanwhile, PPI Stage 4 Intermediate Demand prices–input costs into goods and services ready for final sale–fell -0.2%.
All together consistent with May CPI to suggest low price pressures in May. pic.twitter.com/croQ7nsKsr
— Ernie Tedeschi (@ernietedeschi) June 13, 2024
In related economic news, initial unemployment claims rose to 242,000 for the week ending June 8, marking the highest level since August of the previous year and an increase from the prior week. Continuing unemployment claims also rose, totaling 1.82 million, an increase of 30,000 from the week before. These figures indicate ongoing adjustments in the labor market, which could influence future inflationary trends and monetary policy decisions. As we’ve seen, the majority of jobs went to illegals and migrants, and we actually lost full time jobs nationwide. What we did gain in were part time positions. The media likes to hide this fact in order to make Biden look good.
Major Points:
- The Producer Price Index (PPI) unexpectedly decreased by 0.2% in May, reversing a previous increase and defying analyst predictions of a rise.
- Core PPI, excluding volatile items like food and energy, remained unchanged, contradicting expectations for a 0.3% increase.
- Year-over-year, the PPI increased modestly by 2.2%, indicating a slowdown in inflation at the wholesale level.
- The decline in PPI was largely influenced by a significant drop in energy prices and a slight decrease in food prices.
- Stock market responses were mixed, with modest gains in futures but a notable drop in the Dow, amidst market hopes for Federal Reserve rate cuts later in the year.
TL Holcomb – Reprinted with permission of Whatfinger News
