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) Fell 0.5% in October
Posted Under: Data Watch • Government • Inflation • Markets • PPI • Fed Reserve
Supporting Image for Blog Post


Implications:   There is plenty in today’s report on producer prices that the Fed (and markets) will be happy to see, but that doesn’t mean it’s time to declare final victory in the fight against inflation.  As you can see from the nearby chart, the year-ago comparison for producer prices, now up 1.3%, has fallen considerably since the 11.7% peak in March 2022.  Keep in mind, though, that much of the moderation is due to outsized jumps in inflation immediately after the invasion of Ukraine last year, which are now rolling off year-ago calculations.  And energy prices have been a major contributor to outsized swings in month-to-month inflation readings.  This month was no exception, with energy prices falling 6.5%, the fifth move of 5.0%+ in the past year alone.  Taking a look at the details of today’s report shows that “core” prices – which excludes the typically volatile food and energy components – were unchanged in October and are up 2.4% in the past year.  Goods sector prices fell 1.4% on the back of a 15.3% decline in gasoline prices.  Strip out just energy, and goods prices were unchanged on the month.  Services prices were unchanged in October as higher costs for transportation and warehousing were tempered by a decline in margins received by wholesalers.  Prices further back in the pipeline fell in October.  Intermediate demand processed goods prices declined 0.9% and are down 4.5% in the past year.  Meanwhile unprocessed goods prices fell 1.4% in October following 2.0%+ increases in each of the prior three months.  These prices remain down 14.0% in the past year.  Sufficiently tight monetary policy is doing its job, now it’s on the Fed to see the mission through to completion.

Clikc here for a PDF version

Posted on Wednesday, November 15, 2023 @ 11:17 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.