Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       

Blog Home
   Brian Wesbury
Chief Economist
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
X •  LinkedIn
  The Producer Price Index (PPI) increased 0.8% in April
Supporting Image for Blog Post

Implications: Declining oil prices may temporarily tame producer price inflation in May, but, through April, inflation was roaring.  Prices are up 6.8% in the past year and accelerating.  In the past six months producer prices are up at an 11.5% annual rate; in the past three months they're up at a 13.1% rate.  Most of the gain in April was due to energy.  But, while the Federal Reserve can still claim core inflation is low for consumers, core producer prices are accelerating, up 0.3% in April and up at a 3.2% annual rate in the past three months.  Further up the production pipeline, core intermediate prices increased 1.1% in April and are up at a 13.1% annual pace in the past three months; core crude prices bounced back in April increasing 2.6%, and are up at a 10.5% rate in the past three months.  Based on these inflation signals and the current state of the economy, the Fed's monetary policy is way too loose, even if headline inflation takes a breather in May due to the drop in oil prices.  In other news this morning, new claims for unemployment insurance fell 44,000 last week to 434,000.  This is very close to the four-week moving average of 437,000.  Continuing claims for regular state benefits increased 5,000 to 3.76 million.  Claims have been roiled of late by early auto shutdowns related to the disasters in Japan as well as a brutal tornado season in much of the Midwest and South.  We expect claims to generally decline over the next several weeks.

Click here for the entire report.
Posted on Thursday, May 12, 2011 @ 10:37 AM • Post Link 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.
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.