US Macro Updates

15th Jul 2026 NEW

Key takeaway: The Producer Price Index for Final Demand measures the average change in selling prices received by domestic producers, making it a critical leading indicator of consumer inflation as cost pressures at the producer level tend to flow through the supply chain and eventually reach end consumers via higher retail prices. When input costs rise, businesses face a choice between absorbing the increase through compressed margins or passing costs downstream, meaning sustained PPI movements typically foreshadow shifts in the Consumer Price Index with a lag of several months. The June 2026 decline of 0.28% month-over-month offers an encouraging signal that upstream price pressures are easing, which could translate into softer consumer inflation readings in the months ahead if the trend holds. Over the past 12 to 24 months, PPI has broadly moderated from the elevated levels seen during the post-pandemic supply chain disruption era, reflecting a gradual normalization in goods and commodity markets. This disinflationary trend at the producer level provides some relief to corporate margins, as businesses that previously struggled to pass on rising input costs may find their cost structures stabilizing. From a pricing power perspective, a softening PPI environment can be a double-edged sword, easing cost burdens but also reducing the justification for further consumer price increases, which may pressure revenue growth in some sectors. For the Federal Reserve, continued deceleration in producer prices reinforces the narrative that inflation is on a sustainable path back toward the 2% target, potentially keeping the door open for policy easing if the trend is corroborated by broader demand-side data.

PPI – Final Demand decreased 0.28% in Jun to 156.57.

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11th Jun 2026 NEW

Key takeaway: The Producer Price Index for Final Demand is a closely watched leading indicator of consumer inflation, as price pressures at the producer level typically flow through the supply chain and manifest in retail prices within one to three months. When input costs rise for manufacturers and service providers, businesses face a choice between absorbing margin compression or passing those costs downstream to consumers, making PPI movements a reliable early signal for CPI trajectory. The 1.06% month-over-month increase in May 2026 represents a notable acceleration in producer-level inflation, suggesting that pipeline price pressures remain elevated and have not yet meaningfully dissipated. Over the past 12 to 24 months, the PPI trend has reflected the broader tension between residual supply chain disruptions, labor cost stickiness, and the lagged effects of prior Federal Reserve tightening cycles attempting to cool demand. A reading of this magnitude will likely concern Fed officials who have been monitoring for sustained disinflation progress before considering any pivot toward rate cuts, as renewed producer price momentum complicates that narrative. Corporate margins face renewed pressure in this environment, particularly for businesses with limited pricing power or those operating under fixed-price contracts, as rising input costs erode profitability if they cannot be passed on. The Fed will be watching whether this May spike proves transitory or marks the beginning of a renewed inflationary leg that could delay monetary easing well into the latter part of 2026.

PPI – Final Demand increased 1.06% in May to 157.66.

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13th May 2026 NEW

Key takeaway: The Producer Price Index for Final Demand is a closely watched leading indicator of consumer inflation, as price pressures at the producer level typically flow through the supply chain and manifest in consumer prices with a lag of several months. When businesses face rising input costs, they generally pass those costs downstream to wholesalers, retailers, and ultimately consumers, creating a direct transmission mechanism between PPI and CPI. A monthly increase of 1.38% in April 2026 represents a notably sharp acceleration, signaling that pipeline inflation pressures are building and may translate into renewed consumer price increases in the months ahead. Over the past 12 to 24 months, PPI had shown signs of gradual moderation from the elevated levels seen in the post-pandemic period, making this month’s jump a potentially significant reversal of that disinflationary trend. For corporations, sustained producer price increases compress margins when pricing power is limited, though firms with stronger market positions may attempt to pass costs on to consumers. The Federal Reserve will likely scrutinize this reading carefully, as a reacceleration in producer prices complicates its inflation outlook and could delay or reduce the scope of any anticipated rate cuts. Markets should expect this data point to add upward pressure to inflation expectations and potentially shift the tone of Fed communications in the near term.

PPI – Final Demand increased 1.38% in Apr to 156.5.

PPI – Final Demand – April 2026: +1.38% (156.50)

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14th Apr 2026

Key takeaway: The BLS March 2026 PPI report, released April 14, delivered a notably softer-than-expected result despite the energy shock from the Iran war. The Producer Price Index for final demand rose 0.5% on a seasonally adjusted basis in March, with the 12-month rate accelerating to 4.0% — the largest annual gain since February 2023. The result came in well below the Dow Jones consensus estimate of 1.1%, and the core PPI — excluding food and energy — rose just 0.1% against a forecast of 0.5%. Energy was the dominant driver: final demand goods prices jumped 1.6%, the largest rise since August 2023, with nearly half of that advance attributable to a 15.7% surge in gasoline prices, while diesel prices soared 42% and jet fuel rose 30.7%. Importantly, final demand services prices were unchanged in March, with increases in transportation and warehousing (+1.3%) offset by a 0.3% decline in trade services margins. The flat services reading — a key focus for the Fed as it strips out tariff and war-related distortions — was seen as reassuring. Combining the CPI and PPI data, Bank of America estimated that March PCE inflation will come in around 3.1% annually for headline and 3.5% for core, and that these trends should keep the Fed firmly on hold in the near-term. 

• PPI for Mar 2026 increased 4.0% y-o-y (Expectations 4.6%)
• PPI for Mar 2026 increased 0.5% over prior month (Expectations +1.1%)

18th Mar 2026

Key takeaway: Data released by the U.S. Bureau of Labor Statistics showed that the Producer Price Index for final demand increased by 0.7% in February, following a 0.5% increase in January and above expectations for a more modest gain. On a year-over-year basis, producer prices increased by 3.4%, up from 2.9% in the previous month. Meanwhile, core PPI, which excludes food and energy, increased by 0.5% during the month, with core prices rising by 3.9% compared with a year earlier. The increase in producer prices was driven by higher prices for both goods and services, with notable contributions from food and energy as well as trade services, although the pace of increase in services moderated slightly compared with January. Taken together, the latest data suggests that upstream price pressures picked up in February, indicating that underlying inflationary pressures remain elevated. PPI had been on a rising trend from even before the war in the Middle East started. The sharp rise in energy prices has the potential to raise inflationary pressures in the economy. 

• PPI for Feb 2026 increased 3.4% y-o-y (Expectations 2.9%)
• PPI for Feb 2026 increased 0.7% over prior month (Expectations +0.3%)

27th Feb 2026

Key takeaway: (Delayed release due to govt shutdown) – The latest data for January shows producer prices printed much higher than expected. The headline Producer Price Index for final demand increased 0.5% compared to consensus expectations of 0.3%. Core PPI, excluding food and energy, also sharply increased rising by 0.8% m-o-m compared to consensus expectations of 0.3%. On a y-o-y basis, headline PPI declined from 3.0% to 2.9% and Core PPI increased from 3.3% to 3.6%. Despite higher inflation prints, treasury yields moved lower in the day on a broader risk off sentiment. 

• PPI for Jan 2026 increased 2.9% y-o-y (Expectations 2.6%)
• PPI for Jan 2026 increased 0.5% over prior month (Expectations +0.3%)

14th Jan 2026

Key takeaway: (Delayed release due to govt shutdown) – The latest data for November shows producer prices printed softer than expected. The headline Producer Price Index for final demand increased 0.2%, in line with consensus expectations. However, Core PPI, excluding food and energy was unchanged for the month and lower than consensus expectations. The latest release contained PPI data for both October and November. Even though monthly readings were soft, it is key to note that headline PPI at 3.0% remains well above the 2% Fed target for inflation. 

• PPI for Nov 2025 increased 3.0% y-o-y (Expectations 2.7%)
• PPI for Nov 2025 was unchanged 0.0% over prior month (Expectations +0.2%)

26th Nov 2025

Key takeaway: (Delayed release due to govt shutdown) – Barring a high print in July, PPI prints have been relatively modest for most of 2025 after an initial surge seen during late 2024 into early 2025. The latest data for September shows producer prices once again printed softer than expected. The headline Producer Price Index for final demand increased 0.3% compared to consensus expectations of a rise of 0.3%. The y-o-y change was 2.7% equalling consensus expectations and the print from the previous month of August. Core PPI, excluding food and energy rose 2.6%, but less than consensus expectations. The delayed CPI and PPI releases for the month of September have both been relatively soft. The delayed release of Retail Sales for the month of September was also relatively modest. Both these data points have added to expectations of a December rate cut.    

• PPI for Sep 2025 increased 2.7% y-o-y (Expectations 2.7%)
• PPI for Sep 2025 increased 0.3% over prior month (Expectations +0.3%)

10th Sep 2025

Key takeaway: PPI data usually comes in post the CPI release mid-month. Occasionally though, PPI is release before the more important CPI data release, like we have seen in this month. After months of relatively soft prints of both CPI and PPI, we had seen a highly inflationary print in PPI for the month of July. However, the latest data for August shows producer prices once again declined and also came in softer than expected. The headline Producer Price Index for final demand decreased 0.1% compared to consensus expectations of a rise of 0.3%. The y-o-y change was 2.6% compared to consensus expectations of 3.3%. The print was also significantly lower than the previous month’s reading of 3.1%. Similarly, core PPI also rose declined in August with the monthly print falling by 0.1% and the yearly print up 2.8%. So far most monthly CPI and PPI print had lacked any evidence of tariff related inflation. That has been changing a bit over the past couple of prints causing consternation in markets. However, in the latest release, goods PPI increased only 0.1%. That will once again calm fears about a re-acceleration in goods inflation.   

• PPI for Aug 2025 increased 2.6% y-o-y (Expectations 3.3%)
• PPI for Aug 2025 increased 0.1% over prior month (Expectations +0.3%)

14th Aug 2025

Key takeaway: After months of relatively soft prints of both CPI and PPI, we saw a highly inflationary print in PPI for the month of July. The headline Producer Price Index for final demand increased 0.9% compared to consensus expectations of a rise of 0.2%. The y-o-y change was 3.3% compared to consensus expectations of 2.5%. The print was also significantly higher than the previous month’s reading of 2.4%. Similarly, core PPI also rose sharply in July. The monthly print increased 0.9% and the yearly print was up 3.7%. So far most monthly CPI and PPI print had lacked any evidence of tariff related inflation. That has been changing a bit over the past couple of prints causing consternation in markets. Also, while the relationship between PPI and downstream CPI is not very robust, nonetheless a higher PPI print also means some upward pressure on downstream CPI. Moreover if corporates do not pass on these increases in producer prices, it is likely to crimp corporate margins with the effect likely to be seen in the next couple of quarters.  

• PPI for Jul 2025 increased 3.3% y-o-y (Expectations 2.5%)
• PPI for Jul 2025 increased 0.9% over prior month (Expectations +0.2%)

16th Jul 2025

Key takeaway: Inflation readings have have generally been soft over the past 4-5 months. Post a mixed CPI print yesterday, we saw a relatively soft PPI print today. The Producer Price Index for final demand was unchanged for the month in June. The y-o-y change was 2.3%. Both figures were significantly lower than previous month as well as against consensus expectations. Similarly, core PPI was also unchanged for the month and increased 2.6% y-o-y compared to 3.2% previous month. While yesterday’s CPI data provided some indication of price increases in certain categories on account of tariffs, the latest PPI data lacks evidence of tariff related price increases. Also, while the relationship between PPI and downstream CPI is not very robust, nonetheless a lower PPI print also means some continued downward pressure on downstream CPI.  

• PPI for Jun 2025 increased 2.3% y-o-y (Expectations 2.5%)
• PPI for Jun 2025 increased 0.0% over prior month (Expectations +0.2%)

12th Jun 2025

Key takeaway: Inflation readings have have generally been soft over the past 4 months. We once again saw a soft CPI print followed by an even weaker print on PPI. The Producer Price Index for final demand increased 0.1% in May. Consensus expectations were for a +0.2% print. Similarly, core PPI increased 0.1% for the month compared to expectations of a 0.3% increase. When we look at the y-o-y metrics, we see that the headline PPI increased 2.6%and Core PPI increased 3.0%. However, similar to recent months we also saw previous month’s figures being revised higher. Hence, y-o-y figures have remained relatively high. Nonetheless, the data on both CPI and PPI have indicated that tariff related price increases have not yet been transmitted to the broader economy and companies are mostly absorbing the hit from tariffs instead of passing them onto the consumers. Also, while the relationship between PPI and downstream CPI is not very robust, nonetheless a lower PPI print also means some downward pressure on downstream CPI.  

• PPI for May 2025 increased 2.6% y-o-y (Expectations 2.6%)
• PPI for May 2025 increased 0.1% over prior month (Expectations +0.2%)

15th May 2025

Key takeaway: Inflation readings have have generally been soft over the past 3 months. We saw a soft CPI print yesterday for the month of April. And today that was followed by an even weaker print on PPI for the month of April. The Producer Price Index for final demand decreased 0.5% in April. Consensus expectations were for a +0.2% print. Similarly, core PPI decreased 0.4% for the month compared to expectations of a 0.3% increase. When we look at the y-o-y metrics, we see that the headline PPI increased 2.4%, significantly lower than 3.4% in April. Similarly, Core PPI increased 3.1% compared to 4.0% in March. The sharp drops from the previous month were also due to higher revisions for the previous month. The revisions by itself are a noteworthy development itself since it dampens the overall reduction in inflation that we have seen over the past 3 months. Nonetheless, the overall trend for the past 3 months suggests that companies are mostly absorbing the hit from tariffs instead of passing them onto the consumers. Also, while the relationship between PPI and downstream CPI is not very robust, nonetheless a lower PPI print also means some downward pressure on downstream CPI.  

• PPI for Apr 2025 increased 2.4% y-o-y (Expectations 2.5%)
• PPI for Apr 2025 decreased 0.5% over prior month (Expectations +0.2%)

11th Apr 2025

Key takeaway: Inflation readings have mostly been softer the past couple of months. The Producer Price Index for final demand decreased 0.4% in March. Consensus expectations were for a +0.2% print. Similarly, core PPI decreased 0.1% for the month compared to expectations of a 0.3% increase. When we look at the y-o-y metrics, we see that the headline PPI increased 2.7% compared to consensus expectations of +3.3% and Core PPI increased 3.3% compared to consensus expectations of +3.6%. The Index for final demand goods decreased 0.9% and the index for final demand services decreased 0.2%. It is also key to note that these figures pertain to the month of March, before the tariff related announcements of April 4th.   

• PPI for Mar 2025 increased 2.7% y-o-y (Expectations 3.3%)
• PPI for Mar 2025 decreased 0.4% over prior month (Expectations +0.2%)

13th Mar 2025

Key takeaway: A cooler than expected PPI release on the back of a cooler than expected CPI release! The Producer Price Index for final demand was unchanged in February. Consensus expectations were for a +0.3% print. Similarly, core PPI decreased 0.1% for the month compared to expectations of a 0.3% increase. When we look at the y-o-y metrics, we see that the headline PPI increased 3.2% compared to consensus expectations of +3.3% and Core PPI increased 3.4% compared to consensus expectations of +3.6%. Both the CPI and PPI prints for the month of February have been the exact opposite of the January numbers. This will ease some of the pressure on the Fed to keep short term rates elevated. The Index for final demand goods rose 0.3% and the index for final demand services decreased 0.2%. However, it is also key to note that both figures were revised upwards for the previous month of January. The continuing trend to note is that the pace of disinflation in final demand goods has been reducing. In fact final demand goods PPI had been steadily rising since September 2024. Final demand services PPI has moderated a bit, it still remains uncomfortably high at around 4%. However, despite all this good news on the CPI and PPI, the key story has been the sell off in the bond market. No once could have predicted that after a cooler than expected CPI and PPI, treasuries would be selling off with yields up. But that was precisely the immediate reaction and the 10 year yield is up almost 15 basis points from the pre-CPI low.    

• PPI for Feb 2025 increased 3.2% y-o-y (Expectations 3.3%)
• PPI for Feb 2025 was unchanged 0.0% over prior month (Expectations 0.3%)

13th Feb 2025

Key takeaway: A hotter than expected PPI release on the back of a hotter than expected CPI release! The Producer Price Index for final demand rose 0.4% in January. Consensus expectations were for a 0.3% print. Similarly, core PPI increased 0.3% for the month compared to expectations of a 0.3% increase. When we look at the y-o-y metrics, we see that the headline PPI increased 3.5% compared to consensus expectations of +3.2% and Core PPI increased 3.6% compared to consensus expectations of +3.3%. Overall the report was significantly hotter than expected. The Index for final demand goods rose 0.6% and the index for final demand services rose 0.3%. The continuing trend to note is that the pace of disinflation in final demand goods has been reducing. In fact over the past few months we have seen an acceleration in goods inflation, both in the PPI and CPI. On the other had, while services inflation has moderated a bit, it still remains uncomfortably high. However, despite all this bad news, the key story of today so far has been the rally in the bond market. No once could have predicted that after a hot CPI, lower initial jobless claims and a hot PPI, the treasury market would be rallying with yields down. But that was precisely the immediate reaction and the 10 year yield was down about 7-9 basis points..   

• PPI for Jan 2025 increased 3.5% y-o-y (Expectations 3.2%)
• PPI for Jan 2025 was increased 0.4% over prior month (Expectations 0.3%)

14th Jan 2025

Key takeaway: A dovish surprise on inflation after a long time! The Producer Price Index for final demand rose 0.2% in December. Consensus expectations were for a 0.4% print. Similarly, core PPI printed flat 0.0% for the month compared to expectations of a 0.3% increase. The PPI precedes the more important CPI due tomorrow. Market participants will take a lot of comfort from this lower than expected print. The Index for final demand goods rose 0.6% and the index for final demand services was flat at 0.0%. One of the key points to note though has been the slowdown in the pace of disinflation in final demand goods, much similar to the slowdown in disinflation in the goods component of CPI as well. On a y-o-y basis, the Index rose 3.3%. This increase of 3.3% for 2024 was higher than the 1.1% seen in 2023.   

• PPI for Dec 2024 increased 3.3% y-o-y (Expectations 3.5%)
• PPI for Dec 2024 was increased 0.2% over prior month (Expectations 0.4%)

12th Dec 2024

Key takeaway: The Producer Price Index for final demand rose 0.4% in November. The Index for final demand goods rose 0.7% and the index for final demand services rose 0.2%. On a y-o-y basis, the Index rose 3.0%. The reading was generally higher than consensus expectations. However, a large part of the index increase, especially for goods, was tied to a 54.6% jump in the Index for chicken eggs. The Index for services, on the other hand, rose by a more muted 0.2% m-o-m. Similar to how sticky core consumer price inflation has been, PPI has been in a 2.0-3.0% range for the past 18 months. However, the past few months have exhibited a rising trend in the PPI. Core PPI, excluding food, energy and trade, has also hovered around the 3.5% mark over the past 6-8 months.    

• PPI for Nov 2024 increased 3.0% y-o-y (Expectations 2.6%)
• PPI for Nov 2024 was increased 0.4% over prior month (Expectations 0.2%)

14th Nov 2024

Key takeaway: Similar to yesterday’s October CPI print, the latest PPI print for the month of October was mostly in line with expectations. Headline PPI was up 0.2% m-o-m and increased 2.4% y-o-y. This was a bit of an acceleration from the 1.9% seen in September. Prices for final demand goods inched up 0.1%. But most of the rise in headline PPI was contributed by a 0.3% increase in the index for final demand services. Similar to how sticky core consumer price inflation has been, PPI has been in a 2.0-3.0% range for the past 18 months. PPI, excluding food, energy and trade, also accelerated from 3.3% to 3.5% in October. Based on the latest CPI and PPI data, PCE (the Fed’s preferred measure of inflation) is expected to come in at 2.3% in October and 2.8% excluding food and energy.    

• PPI for Oct 2024 increased 2.4% y-o-y (Expectations 2.3%)
• PPI for Oct 2024 was increased 0.3% over prior month (Expectations 0.3%)

14th Oct 2024

Key takeaway: The latest print of CPI had shown hotter than expected data for the month of September. Hence, market participants were keenly awaiting the PPI print to gauge overall inflationary pressures in the economy and to estimate the upcoming release of the PCE Price Index – the Fed’s preferred gauge of inflation. PPI fort September was mostly in line with expectations, though some prints were higher than expected. Headline PPI was unchanged at 0% for the month and increased 1.8% y-o-y. This was lower than the 1.9% seen in the previous month of August. Core PPI – which excludes food and energy, on the other hand, increased from 2.6% in August to 2.8% in September. Core PPI has generally been flat in the 2.0-3.0% band since hitting a low of 1.7% in late 2023. Overall PPI Services was marginally higher and that was offset by a small decline in PPI for goods. Based on the latest CPI and PPI figures, PCE inflation for the month of September is expected to print very close to the 2% target level.   

• PPI for Sep 2024 increased 1.8% y-o-y (Expectations 1.6%)
• PPI for Sep 2024 was unchanged at 0.0% over prior month (Expectations 0.1%)

13th Aug 2024

Key takeaway: Another day, another soft inflation print! Inflation has generally been trending down after some hot prints at the start of the year. The Producer Price Index for final demand increased a soft 0.1% in July. The print was also lower than the consensus expectations of an increase of 0.2%. Similarly, Core PPI was flat 0.0% m-o-m compared to consensus expectations of a rise of 0.2%. The index for final demand goods rose 0.6% and the index for final demand services fell 0.2%. Generally, both headline PPI and Core PPI were displaying an increasing trend in the first four months of the year and hence the latest declines are welcoming for markets.  

• PPI for Jul 2024 increased 2.2% y-o-y (Expectations 2.3%)
• PPI for Jul 2024 increased 0.1% over prior month (Expectations 0.2%)

13th Jun 2024

Key takeaway: One more day and one more soft inflation print. After a soft CPI release it is now the PPIs turn to pleasantly surprise the markets. The trend of directionally similar PPI and CPI reports also continued in May. The Producer Price Index for final demand decreased 0.2% in May compared to consensus expectations of an increase of 0.1%. Similarly, Core PPI was flat 0.0% m-o-m compared to consensus expectations of a rise of 0.3%. Unsurprisingly, markets responded positively with risk assets mostly up across the board. Treasury yields were down for the day as well. The index for final demand goods decreased 0.8% and the index for final demand services was flat at 0.0%. Generally, both headline PPI and Core PPI were displaying an increasing trend in the first four months of the year and hence the decline in May is welcome respite for markets.  

• PPI for May 2024 increased 2.2% y-o-y (Expectations 2.5%)
• PPI for May 2024 decreased 0.2% over prior month (Expectations 0.1%)

14th May 2024

Key takeaway: The first of the 3 inflation readings for the month is here and continuing the trend of recent months, it has surprised significantly on the higher side. The Producer Price Index for final demand rose 0.5% in April compared to consensus expectations of 0.3%. Similarly, Core PPI rose 0.5% m-o-m compared to consensus expectations of a rise of 0.2%. Surprisingly, even though headline indices increased substantially, markets responded positively with risk assets mostly up across the board. Treasury yields had spiked in immediate response to the hotter than expected inflation print but also came rapidly down within a few minutes of trading. In terms of details of the report, the index for final demand goods increased 0.4% and the index for final demand services increased 0.6%. Both categories have been displaying an increasing trend since the start of the year which is disconcerting from a downstream inflation perspective.   

• PPI for Apr 2024 increased 2.2% y-o-y (Expectations 2.2%)
• PPI for Apr 2024 increased 0.5% over prior month (Expectations 0.3%)

11th Apr 2024

Key takeaway: We have seen on a number of occasions in the past that CPI and PPI move in tandem. For the past two months, both CPI and PPI had deliver hotter-than-expected prints causing markets to reprice their view of the upcoming interest rate cutting cycle. CPI for March was also hotter than expected. The latest PPI print for March was a mixed bag though.  PPI for final demand rose 0.2% m-o-m in March and 2.1% y-o-y. Both prints were slightly below consensus estimates. On the other hand, Core PPI, which excludes food and energy increased 0.2% m-o-m and 2.4% y-o-y – slightly higher than consensus estimates. Overall though, this was a muted print for both goods and services alike and would be welcomed by markets desperately looking for some respite from the recent bad data.  

• PPI for Mar 2024 increased 2.1% y-o-y (Expectations 2.2%)
• PPI for Mar 2024 increased 0.2% over prior month (Expectations 0.3%)

14th Mar 2024

Key takeaway: We have seen on a number of occasions in the past that CPI and PPI move in tandem. For two months in a row, both CPI and PPI have deliver hotter-than-expected prints causing markets to reprice their view of the upcoming interest rate cutting cycle. The latest PPI print for February showed final demand prices rose a significant 0.6% m-o-m and 1.6% y-o-y. The most important detail to note in the latest release was a sharp acceleration in goods prices. Final demand goods prices rose 1.2% m-o-m. However, a large portion of the increase can be attributed to energy costs. Core goods prices excluding food and energy rose 0.3%. However, even 0.3% becomes too high a number when the Fed is relying on goods deflation to pull down the overall inflation number and when services inflation continues to run hot. Final demand services excluding trade, transport and warehousing increased 0.5% m-o-m.  

• PPI for Feb 2024 increased 1.6% y-o-y (Expectations 1.1%)
• PPI for Feb 2024 increased 0.6% over prior month (Expectations 0.3%)

16th Feb 2024

Key takeaway: Similar to CPI for January, PPI for the month of January also came in hotter than expected. Hotter prints on both key metrices have resulted in the significant repricing of the Fed Funds curve and expectations of rate cuts has been pushed back by a few months. The key point to note in the latest PPI print was an acceleration in PPI for final demand services, which increased 0.6% m-o-m in January. In contrast, the index for final demand goods decreased 0.2%. However, a large portion of the decline in goods PPI was attributable to a decline in energy inflation. Core goods PPI actually increased 0.3% m-o-m. Similarly, PPI for final demand services excluding trade, transportation and warehousing increased a substantial 0.8%. On the whole, this was definitely a vey hot PPT print – similar to January CPI. It might be too early to call this the start of a trend. But definitely requires close monitoring.     

• PPI for Jan 2024 increased 0.9% y-o-y (Expectations 0.6%)
• PPI for Jan 2024 increased 0.3% over prior month (Expectations 0.1%)

12th Jan 2024

Key takeaway: Unlike the CPI, PPI for the month of December came in lower than consensus expectations. Markets are searching for any signs of softening inflation and a slowing economy and hence yields fell in immediate response. Final demand goods declined 0.4%, mostly driven by large declines in energy and food. Core final demand goods was unchanged at 0.0%. Final demand services was unchanged at 0.0%, once again mostly attributable to declines in trade and transport margins. On a full year basis, the headline PPI index has climbed only 1% compared to over 6% in 2022. While PPI does not have very strong correlation with downstream CPI, it is still a good enough indicator of consumer inflation in the pipeline. And based on recent trends in PPI, we can continue to expect benign downstream consumer inflation.    

• PPI for Dec 2023 increased 1.0% y-o-y (Expectations 1.3%)
• PPI for Dec 2023 decreased at 0.1% over prior month (Expectations +0.1%)

13th Dec 2023

Key takeaway: PPI for November was a non event. PPI for Total Final Demand, final demand goods and final demand services were all unchanged in the month of November. On a y-o-y basis, PPI final demand was only 0.9% up and core PPI which excludes food, energy and trade was up 2.5%. While PPI does not have very strong correlation with downstream CPI, it is still a good enough indicator of consumer inflation in the pipeline. And based on recent trends in PPI, we can continue to expect benign downstream consumer inflation.    

• PPI for Nov 2023 increased 0.9% y-o-y (Expectations 1.0%)
• PPI for Nov 2023 was unchanged at 0.0% over prior month (Expectations +0.1%)

11th Oct 2023

Key takeaway: Just like it has happened so many times in the past year or so, surprises on CPI and PPI have moved hand in hand. Yesterday, we saw both CPI and core CPI surprise to the downside resulting in a massive rally in bonds and stocks. Today, PPI also came in lower than expected and that resulted in a continuation of the risk rally we saw yesterday. Firstly, in line with consensus expectations, wholesale energy prices reduced in October (-6.5%). That primarily caused headline goods PPI to fall 1.4% and headline PPI to fall 0.5%. However, even outside the energy component, wholesale prices either declined outright or decelerated in October. Core goods PPI and core services PPI both increased a muted 0.1% in October.   

• PPI for Oct 2023 increased 1.3% y-o-y (Expectations 1.9%)
• PPI for Oct 2023 decreased 0.5% over prior month (Expectations +0.1%)

11th Oct 2023

Key takeaway: Last month, both the CPI and PPI had surprised to the upside. While headline PPI in August had accelerated, a large proportion was contributed by the sharp rise in energy prices. In line with consensus expectations, the growth in energy prices reduced in September. Accordingly, PPI for final demand goods decelerated from a high of 2.0% last month to 0.9% in September. Even then, a large part of this increase was contributed by energy prices. Core goods wholesale inflation remained muted at 0.1% m-o-m. Three month annualized core goods PPI is still muted at below 1%. Core services inflation, on the other hand, printed the same 0.3% m-o-m in September as the last month of August. On a 3 month annualized basis, service wholesale inflation remains relatively high at 4.8%. While this latest print has the look and feel of accelerating inflation, it is too early to call yet. However, further acceleration in inflation will not be good news for the economy.  

• PPI for Sep 2023 increased 2.2% y-o-y (Expectations 1.6%)
• PPI for Sep 2023 increased 0.5% over prior month (Expectations 0.3%)

14th Sep 2023

Key takeaway: Similar to this week’s August CPI release, the August PPI report showed some mild reacceleration in wholesale prices. Goods PPI which had continued to be minimal or negative increased a substantial 2.0%. However, a large part of the increase was attributable to a 10.5% rise in Energy components. Excluding food and energy, core wholesale goods priced increased a moderate 0.1%. Services PPI continues to be relatively high which remains a concern from the Fed’s perspective. Excluding trade, transportation and warehousing, core services PPI increased 0.3% m-o-m. The key data to watch for going forward will be whether wholesale prices reaccelerate significantly from here on and result in further downstream pressure on CPI. 

• PPI for Aug 2023 increased 1.6% y-o-y (Expectations 1.2%)
• PPI for Aug 2023 increased 0.7% over prior month (Expectations 0.4%)

11th Aug 2023

Key takeaway: Similar to yesterday’s CPI report, the July PPI report was mostly in line with expectations. Goods PPI continues to be minimal or negative. Final demand goods registered 0.1% m-o-m and core goods PPI registered 0% m-o-m. However, services PPI accelerated significantly from minus 0.1% in June to +0.5% in July. A large part of the increase was attributable to a rise in the trade and transportation indexes. Core services PPI, which excludes trade and transportation, printed the same as last month at 0.3% m-o-m. The y-o-y change in headline PPI is now down to 0.8% – from a high of 11% more than a year back.  

• PPI for Jul 2023 increased 0.8% y-o-y (Expectations 0.7%)
• PPI for Jul 2023 increased 0.3% over prior month (Expectations 0.2%)

13th Jul 2023

Key takeaway: Similar to yesterday’s CPI report, the June PPI report was all about core inflation. In a key development, core goods PPI recorded a negative m-o-m print – a first in recent history. If PPI is taken as an indicator for downstream CPI, goods deflation seems well on its way. Core Services PPI, on the other hand, still holds relatively steady at 0.3% m-o-m. However, even the 3 month annualized rate of core Services PPI is down to a relatively low 2.8%.  The y-o-y change in headline PPI is now down to 0.1% – from a high of 11% more than a year back.  

• PPI for June 2023 increased 0.1% y-o-y (Expectations 0.4%)
• PPI for June 2023 increased 0.1% over prior month (Expectations 0.2%)

14th Jun 2023

Key takeaway: Headline PPI recorded negative 0.3% in May (1.1% on a y-o-y basis). That makes it 4 negative m-o-m prints in the last 6 months. Goods inflation has been rapidly coming down, mostly attributable to declines in food and energy costs. Y-o-y prints of goods inflation are finally in negative territory. However, services inflation still holds relatively steady at 0.2% m-o-m. Even core services inflation which strips out trade and transport and warehousing costs is still 3.2% on a 3-month annualized basis.   

• PPI for May 2023 increased 1.1% y-o-y (Expectations 1.5%)
• PPI for May 2023 decreased 0.3% over prior month (Expectations -0.1%)

11th May 2023

Key takeaway: Similar to the April CPI print, there was not much in the April PPI print either for the doves or for the hawks. Though headline PPI or Total Final Demand Index climbed 0.2% m-o-m, slightly lower than consensus expectations. Core goods PPI also climbed 0.2% – the same as the previous month. Core services PPI increased to 0.4% in April compared to 0.2% in March. PPI for transportation and warehousing has recorded a negative print for the past 4 continuous months. On a year on year basis, PPI rose 2.3% – the lowest since Feb 2021.  

• PPI for Apr 2023 increased 2.3% y-o-y (Expectations 2.4%)
• PPI for Apr 2023 increased 0.2% over prior month (Expectations 0.3%)

13th Apr 2023

Key takeaway: In another sign of welcome relief for the US economy, PPI for March moderated further after having cooled a bit in Feb and also came on the heels of a lower than expected CPI print earlier in the week. Risk markets cheered in response and the Dow closed the day almost 400 points up. Headline PPI fell to negative 0.5% m-o-m. On a y-o-y basis, headline PPI was 2.7% – the lowest since this inflation scare began. However, most of the drop can be traced to a 6.4% m-o-m drop in energy in final demand goods. In contrast, final demand goods less food and energy grew 0.3% on a m-o-m basis. The 3 month annualized rate of this core goods PPI has now increased to ~4.8%. Goods disinflation has been a cornerstone of the declining inflation story. Any re-tracing up of goods inflation can be potentially disruptive to the economy. Final demand services also fell 0.3% m-o-m. The decline in services PPI has been seen in both trade (i.e. the margins received by wholesalers and retailers) as well as transportation.  

• PPI for Mar 2023 increased 2.7% y-o-y (Expectations 3.0%)
• PPI for Mar 2023 decreased 0.5% over prior month (Expectations +0.1%)

15th Mar 2023

Key takeaway: After a high print in January, PPI inflation moderated again in February. A reduction in PPI inflation was observed across food, energy, trade and transportation. Core PPI excluding trade (which excludes food, energy and trade from the overall inflation data) increased 0.2% m-o-m (a 3-month annualized rate of 3.6%). Core Goods PPI which excludes food and energy increased 0.3% m-o-m (a 3- month annualized rate of 4.0%). And lastly, Core Services PPI which excludes trade and transport and warehousing grew at 0.3% m-o-m (a 3-month annualized rate of 4.8%). While the monthly numbers recorded a fair tapering of inflation, overall inflation still is in elevated territory and far from the Fed’s comfort levels. 

• PPI for Feb 2023 increased 4.6% y-o-y (Expectations 5.4%)
• PPI for Feb 2023 decreased 0.1% over prior month (Expectations +0.3%)

16th Feb 2023

Key takeaway: One trend has been remarkably consistent the last few months. When it rains, it pours – and this was true of good news and bad news. On the back of a high CPI reading, we now have a higher than expected PPI reading as well. Headline PPI at 0.7% m-o-m and 6.0% y-o-y was higher than consensus expectations. This was not all due to energy. Core PPI which excludes food and energy also increased higher than expected at 5.4% y-o-y. There have been number of studies done on the correlation between PPI and CPI prints and arguments have been made both in favor and against. The Richmond Fed had a note released on this topic in September 2022 which also suggested some correlation between the 2 (found here). What’s more important is that the market also seems to believe the correlation – especially in an environment where both these inflation measures are headed in the same direction. And hence any higher than expected PPI prints will continue to make the risk markets more nervous. 

• PPI for Jan 2023 increased 6.0% y-o-y (Expectations 5.4%)
• PPI for Jan 2023 increased 0.7% over prior month (Expectations 0.4%)

18th Jan 2023

Key takeaway: The string of positive surprises on inflation data continued with the PPI for December release. Prices for final demand goods fell a large 1.6% m-o-m. However, almost 50% of that drop comprised Energy. Prices of Final Demand Goods less Energy and Food (taken as Core Goods Wholesale Inflation) also moderated to 0.2% m-o-m compared to 0.3% in November. Lastly, the all important Services Prices also moderated in December. Core Services – which excludes trade and transportation and warehousing, slowed down to a 0.0% m-o-m change. 

• PPI for Dec 2022 increased 6.2% y-o-y (Expectations 6.8%)
• PPI for Dec 2022 decreased 0.5% over prior month (Expectations -0.1%)

9th Dec 2022

Key takeaway: Usually PPI data is released post the CPI release. This month, however, PPI comes in before CPI and hence there is even more scrutiny on PPI this time. Recall, we experienced a nice positive surprise on both CPI and PPI last month. Markets had then rallied on the expectation of a faster decline in inflation and a Fed slowing down in response. November PPI data, however, was bad news all round. Firstly, like I had pointed earlier, Core Services inflation data matters a lot. And the past 6 months PPI releases have yet to show a meaningful, steady downward trend in Core Services inflation.The index for final demand services accelerated to 0.4% in November from 0.1% in October. But what matters even more is that a large part of this increase is attributable to Core Services (0.4% m-o-m)! Margins for final demand trade services, which shows change in margins received by wholesalers and retailers, also increased a large 0.7% – a solid indication of pricing power of businesses to pass on inflationary costs. Lastly, even PPI for core goods accelerated in November from a relatively calm September and October. All eyes will now be on this week’s CPI release.

• PPI for Nov 2022 increased 7.4% y-o-y (Expectations 7.2%)
• PPI for Nov 2022 increased 0.3% over prior month (Expectations 0.2%)

 

15th Nov 2022

Key takeaway: This feels like Jul-Aug all over again. In a similar turn of events, July CPI had surprised to the downside and was followed up by a favourable July PPI number released in August. The S&P500 had rallied over 15% in the late Jun, Jul and Aug timeframe. Just to refresh our memory on what happened next – a barrage of Fed speak on keeping rates higher for longer to tighten financial conditions once again. Not only did the S&P500 give up the Jul-Aug gain, it hit a new low in October around 3600. So it would not be surprising to see some of the Fed members come in to pour some cold water on ebullient investors even now! But there are 3 points we must remember for this round. First, the monthly core CPI reduction for October was more broad based than in July. While one month does not make a trend, the FOMC will still take heart from the reading. Second, from recent Fed speak it does seem like some members of the FOMC might be against tightening too aggressively (unlike July when there was unanimity). Lastly, the good part about today’s PPI number is that the Index for Final Demand Services (which comprises 65% weight in the PPI) declined 0.1% – in a first such decline since Nov 2020. The Index for Final Demand Goods went up but a substantial portion of that can be traced to an increase in energy price. In contrast, the drop in PPI in July was substantially on account of falling energy prices. Overall, there is no doubt that producer prices have been falling since the past few months. If the pace of decline accelerates further, it can be expected to translate to a lower CPI reading as well. But, just like I mentioned last time (see below!) don’t throw caution to the wind!  

• PPI for Oct 2022 increased 8.0% y-o-y (Expectations 8.3%)
• PPI for Oct 2022 increased 0.2% over prior month (Expectations 0.4%)

 

12th Oct 2022

Key takeaway: Overall, there is no doubt that producer prices have been falling since the past few months. Unfortunately, it has simply not been at the pace that the Fed would have liked to see. September PPI once again came in above expectations. However, that is also partly due to the fact that oil prices levelled off in September compared to the previous 2 months when they were falling from the peak. Some of the core components continue to decelerate. For instance, final demand for goods less food and energy recorded 0% m-o-m. In any case, the bottom line is that the markets and economy, both need producer prices that are falling at a much faster rate than present.  

• PPI for Sep 2022 increased 8.5% y-o-y (Expectations 8.4%)
• PPI for Sep 2022 increased 0.4% over prior month (Expectations 0.2%)

14th Sep 2022

Key takeaway: Last month PPI numbers had come in softer than expected similar to that month’s CPI numbers. And equity markets had rallied. Today, the trend repeated itself with a worse off PPI print similar to yesterday’s CPI print. While headline PPI fell 0.1% m-o-m, core PPI beat expectations increasing 0.4% in August vs 0.3% in July. Yet, overall this report was a respite after a brutal CPI yesterday. Producer prices are undoubtedly coming off their highs and will eventually translate to lower prices for the final consumer. 

• PPI for Aug 2022 increased 8.7% y-o-y (Expectations 8.8%)
• PPI for Aug 2022 decreased 0.1% over prior month (Expectations -0.1%)

11th Aug 2022

Key takeaway: When it rains, it pours ! The sequence of good news continues. Producer prices registered a negative m-o-m print of 0.5% against consensus expectation of +0.2%. Once again, a large portion of the PPI decrease is  attributable to energy price decline. However, Core PPI, just like Core CPI, also came in lower than expected.

• PPI for Jul 2022 increased 9.8% y-o-y (Expectations 10.4%)
• PPI for Jul 2022 decreased 0.5% over prior month (Expectations +0.2%)

14th Jul 2022

Key takeaway: Producer prices also registered a stronger than expected number on the back of a scorching CPI. While the headline number was higher than consensus, core producer price inflation was lower than consensus expectations and was lower than May as well. Moreover, a large portion of the PPI increase was still attributable to goods and with crude oil prices having levelled in July, there is a good chance that prices will level off further in the coming months.

• PPI for Jun 2022 increased 11.3% y-o-y (Expectations 10.7%)
• PPI for Jun 2022 increased 1.1% over prior month (Expectations 0.8%)

14th Jun 2022

Key takeaway: The good news is that the PPI reading for May was lower than consensus. But the good news stops right there. And the reading was only marginally lower than consensus. Just like previous month, PPI remains high enough to keep investor concerns elevated and policy makers hawkish. A couple of other key points. PPI for goods increased in May after having slightly declined in April – which is not a good sign. Prices of processed goods for intermediate demand as well as raw materials for intermediate demand also showed no signs of slowing. Infact, they accelerated on a m-o-m basis. Once again, remember, PPI is a leading indicator for CPI.

• PPI for May 2022 increased 10.8% y-o-y (Expectations 10.9%)
• PPI for May 2022 increased 0.8% over prior month (Expectations 0.8%)

12th May 2022

Key takeaway: Just like the April CPI report, PPI in April moderated a bit from March. Bit it still remains high enough to keep investor concerns elevated and policy makers hawkish. Once again, remember, PPI is a leading indicator for CPI.

• PPI for April 2022 increased 11.0% year over year (Expectations 10.7%)
• PPI for April 2022 increased 0.5% over prior month (Expectations 0.5%)

13th Apr 2022

Key takeaway: Though core CPI came in a bit softer the day before, a stubbornly high PPI still keeps rising inflation fears centerstage. Remember, PPI is a leading indicator for CPI. Also the magnitude by which actual readings exceeded expectations was key.

• PPI for Mar 2022 increased 11.2% year over year (Expectations 10.6%)
• PPI for Mar 2022 increased 1.4% over prior month (Expectations 1.1%)

15th Mar 2022

Key takeaway: Yet another inflation metric being stubbornly high. But there were 3 things to note with this report. 1) The month-on-month inflation index was mostly driven by goods. The Services Index was unchanged on a month-on-month basis. 2) A large part of the final demand goods price index was driven by energy costs. So stripping out energy costs, the PPI increase was not as severe. 3) Overall PPI numbers were better than expected and that might have contributed to the decent rally in stocks that we saw today !

• PPI for Feb 2022 increased 10% year over year (Expectations 10%)
• PPI for Feb 2022 increased 0.8% over prior month (Expectations 0.9%)

15th Feb 2022

Key takeaway: Stubbornly high PPI bolsters the case for faster rate hikes

• Producer Prices stayed at record highs indicating persistent economic pressures in the US.
• PPI for Jan 2022 increased 9.7% year over year
• PPI for Jan 2022 increased 1% over prior month