Anyone looking for incremental information in Tuesday’s PPI report for October was disappointed.
Producer prices rose 0.6% MoM, in line with consensus. The YoY print was 8.6%, also as expected.
Headlines will tout an “acceleration” in the monthly print, but if you’re a trader, you’re looking for new information with the potential to alter the macro narrative or otherwise raise policymaker eyebrows. In line prints don’t help much in that regard.
Needless to say, the charts are still remarkable (figure below).
Ex-food and energy, prices rose 0.4% from September. That was cooler than the 0.5% consensus. YoY, core PPI rose 6.8%, as expected.
Nearly two thirds of October’s increase on the headline gauge was down to rising prices for final demand goods (figure below). In turn, 75% of that advance was attributable to a near 5% increase in energy prices.
Prices for final demand foods actually fell. The 0.1% decline was only the second monthly decrease of 2021.
Although October’s 0.2% rise in the final demand services gauge was the 10th consecutive increase, it was also tied with September for the lowest monthly gain of the year (figure below).
Tuesday’s data came ahead of Wednesday’s closely-watched CPI figures for October.
The PPI data underscores the persistence of bottlenecks, supply chain disruptions, rising wages and myriad other pandemic distortions which together comprise the boilerplate copy for all articles documenting ongoing price pressures.
The figure (below, from BofA) speaks for itself.
Corporate management mentions of “inflation-related” topics on earnings calls soared last quarter.
“Inflation continues to be the biggest topic this earnings season, with mentions of ‘inflation’ further rising to a record high, up +850% YoY,” BofA wrote, in a recap of Q3 earnings trends.
Suffice to say this is a hot topic. Figuratively and literally.
Here is another look at inflation. I have been tracking the all in cost to attend 18 of some of the best universities in the US since 2014.
Within the list of 18, there are some private, ivy league and also public universities. All academic stellar reputations.
The cost to attend, including room and board and based on what each university posts on their own website regarding “cost to attend”, has increased, on average, by 4% annually, over the past 7 years.
The average for my list of 18 is just shy of $80,000/ year for the 2021-2022 academic year.
That does not hit the lower income families, just those with enough income who can afford to pay.