PPI: A Third Sign Of Stubborn Inflation?

Investors will be looking for further signs of inflation in Thursday’s PPI figures after Tuesday’s higher than expected CPI reading. It is becoming increasingly clear that getting inflation under control will take more time than expected.


The Producer Price Index (PPI) measures the change in the price of goods sold by manufacturers. It is a leading indicator of consumer price inflation, accounting for most of inflation overall.


US producer prices fell the most in December since the start of the pandemic, extending a month-long pullback in inflationary pressures and giving the Federal Reserve leeway to slow the pace of interest rate hikes.


PPI month on month (MoM) is expected to rise in January by 0.4%, and 5.4% year on year (YoY). Meanwhile, core PPI (MoM) is expected to rise in January by 0.3%, and 4.9% (YoY).



Consumer prices in the United States rose rapidly at the start of the year, indicating persistent inflationary pressures that could push the Federal Reserve to raise interest rates even higher than previously anticipated. Both annual measures came in higher than expected and decelerated much slower than in recent months. The figures are still far above the Federal Reserve's 2% target, based on a separate index from the US Department of Commerce.


Bank of America Corp's latest global fund manager survey found that 66% of respondents said they are seeing a bear market rally in stocks, and expect them to return to new lows





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