US Producer Inflation PPI Keeps the Pace, Despite the Growing Global Economic Weakness
Inflation took a big hit in spring, as crude oil prices tumbled lower. The decline in oil prices translated into lower PPI (producer price index) inflation, which spilled over onto the CPI (consumer price index). But, inflation bounced higher during summer, after the reopening of the global economy.
However, the global economy is heading back into recession with the new lockdowns, which has turned inflation negative in some places, particularly in the Eurozone. In the US, CPI inflation is holding up a bit better, and the PPI report today actually showed a pickup for October.
US PPI Inflation Report for October
- October PPI +0.3% m/m vs +0.2% expected
- September PPI was +0.4%
- Ex food and energy +0.1% vs +0.2% exp
- Prior ex food and energy +0.4%
- Ex food, energy and trade +0.2% vs +0.2% exp
- Final demand y/y +0.5% vs +0.4% exp
- Prior final demand +0.4%
- Ex food and energy y/y +1.1% vs +1.2% exp
- Ex food, energy and trade +0.8% y/y vs +0.9% exp
Producer price inflation is not a big factor at the moment, but given the drop in oil prices and the fact that we’re in the midst of a raging global pandemic, it could certainly be worse.
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