– by New Deal democrat
Generally producer costs lead client costs; typically they don’t – however within the sense that typically there is no such thing as a lag in any respect earlier than will increase present up in client costs. In any occasion, total the message from the producer worth index this morning was benign, with little or no stress “in the pipeline” for client inflation.
To start with, uncooked commodity costs (crimson) declined -1.2% in September, persevering with their 2+ yr downtrend; whereas last demand costs (blue) elevated lower than 0.1%:
On a YoY foundation, commodity costs are down -2.5%, whereas last demand producer costs are solely up 1.8%:
About the one place the place any (slight) upward stress exhibits up is in last demand producer costs for companies (grey), which elevated 0.2% in September. Remaining demand producer costs for items (gold) declined -0.2%:
On a YoY foundation, items costs are down -1.1%, whereas companies costs are up 3.1%:
There seems to be a slight upward development in companies inflation, however it’s inside the vary of noise as effectively.
Briefly, in the present day’s producer worth report, like yesterday’s client worth report, was nearly fully benign.
I also needs to level out that sometimes a decline in commodity costs is taken as an indication of weakening demand (unhealthy) somewhat than, because it was in 2022-23, a glut of provide (good). And on a world scale, the decline in items costs most likely is extra about weakening demand now. However that weakening demand, as far as I’ve learn, is all about China. And for the reason that market is international, that is nearly definitely a internet boon to the home US financial system.
“Producer prices remain tame,” Indignant Bear by New Deal Democrat
