Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow First Trust: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  The Producer Price Index (PPI) Declined 0.2% in October
Posted Under: Data Watch • PPI

 
Implications: After two straight months of steep gain, producer prices took a breather in October, dropping 0.2% instead of the consensus expected gain of 0.2%. Lower energy prices played a role but “core” prices, which exclude food and energy and which the Federal Reserve claims are more important than the overall number, were also down 0.2%, the biggest monthly decline since October 2010. The drop in core prices was mainly due to vehicles, reflecting the change-over to next year’s models. Even with the 0.2% decline, “core” prices are still up 2.1% from a year ago, slightly above the Federal Reserve’s 2% target. Some analysts may suggest that with the PPI only up 2.3% from a year ago, the Federal Reserve has room for more quantitative easing. We think monetary policy is loose enough already; the problems that ail the economy are fiscal and regulatory, not monetary. Adding more excess reserves to the banking system is not going to boost economic growth. In other inflation news from late last week, import prices increased 0.5% in October, but are up only 0.4% in the past year. Excluding petroleum, import prices were up 0.3% in October but down 0.3% from a year ago. Export prices were unchanged in October but up 1.4% in the past year. Ex-agriculture, export prices are up 0.2% both in October and in the past year. Given the loose stance of monetary policy, higher inflation is eventually on the way.

Click here for a PDF version
Posted on Wednesday, November 14, 2012 @ 10:06 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L. P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
 PREVIOUS POSTS
Leaning Left
The Trade Deficit in Goods and Services Came in at $41.5 Billion in September
The ISM Non-Manufacturing Index Declined to 54.2 in October
Election Matters, But Stocks are Cheap
Non-Farm Payrolls Increased 171K in Oct, Revisions to Aug/Sep Bring the Net Gain to 255K
The ISM Manufacturing Index Rose to 51.7 in October from 51.5 in September
Nonfarm Productivity Increased at a 1.9% Annual Rate in the 3rd Quarter
Personal Income Increased 0.4% in September, Personal Consumption Rose 0.8%
Velocity, Uncertainty & the Economy
The first estimate for Q3 real GDP growth is 2.0% at an annual rate
Archive
Skip Navigation Links.
Tags
 
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
Home |  Important Legal Information |  Privacy Policy |  Business Continuity Plan
Copyright © 2014 All rights reserved.