Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  The Producer Price Index (PPI) Rose 0.1% in June
Posted Under: Data Watch • Employment • Government • Inflation • PPI • Fed Reserve • Interest Rates
Supporting Image for Blog Post

 

Implications:   Producer prices rose 0.1% in June, but finished the first half of 2023 down from where we started the year.  As you can see from the nearby chart, the year-ago comparison for producer prices, now up just 0.1%, has been moderating since the 11.7% peak in March 2022.  Keep in mind, though, that part 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.  Taking a look at the details of today’s report shows that “core” prices – which excludes the typically volatile food and energy components – rose 0.1% in June and are up 2.4% in the past year.  The services sector led prices higher in June, rising 0.2%, while goods prices were unchanged.  Prices further back in the pipeline were decidedly lower, as prices for intermediate demand processed goods fell 0.6% in June while unprocessed goods dropped 2.1% and are down 32.2% in the past year.  While some good news on inflation is welcome, data from yesterday’s CPI report shows the Fed’s job is not yet over.  We expect the Fed to raise rates at the meeting later this month, and likely raise once more before the year is through. The economy is in the grips of a battle between the ongoing impacts from the tsunami of money that hit the system in 2020-2021 and is still being absorbed, while at the same time starting to show signs of the riptide from the Fed and Treasury Department now pulling money out of the system.  Economic growth remains modestly positive, but a recession looks likely in the not-too-distant future.  How the Fed will respond if/when a recession appears is very much an open question.  The Fed’s failures in the 1970s should be a stark reminder of the painful results of easing before the battle against inflation is fully won.  In employment news this morning, initial claims for jobless benefits declined 12,000 last week to 237,000, while continuing claims rose 11,000 to 1.729 million.  These figures suggest continued job growth in July.

Click here for a PDF version

Posted on Thursday, July 13, 2023 @ 11:44 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.