Wholesale prices rose 0.2% in October, less than expected, as inflation eases

[mahatmakanejeeves]

Last edited Tue Nov 15, 2022, 10:15 AM - Edit history (2)

Source: CNBC

ECONOMY

Wholesale prices rose 0.2% in October, less than expected, as inflation eases

PUBLISHED TUE, NOV 15 2022 * 8:31 AM EST * UPDATED 7 MIN AGO

Jeff Cox
@JEFF.COX.7528
https://facebook.com/jeff.cox.7528
@JEFFCOXCNBCCOM
https://twitter.com/JeffCoxCNBCcom

KEY POINTS
-- The producer price index rose 0.2% in October, below the 0.4% estimate.
-- A significant contributor to the slowdown in wholesale inflation was a 0.1% decline in services, the first outright decline in that measure since November 2020.
-- On a year-over-year basis, PPI rose 8% compared to an 8.4% increase in September.
-- In other economic news, the Empire State Manufacturing Survey for November registered a reading of 4.5%, much better than the estimate for a -6% reading.

Wholesale prices increased less than expected in October, adding to hopes that inflation is on the wane, the Bureau of Labor Statistics reported Tuesday. ... The produce price index, a measure of the prices that companies get for finished goods in the marketplace, rose 0.2% for the month, against the Dow Jones estimates for a 0.4% increase.

Stock futures tied to the Dow Jones Industrial Average were up more than 400 points shortly after the release, reflecting market anticipation that cost of living increases not seen since the early 1980s were easing if not receding.

On a year-over-year basis, PPI rose 8% compared to an 8.4% increase in September and off the all-time peak of 11.7% hit in March. The monthly increase equaled September's gain of 0.2%.

Excluding food, energy and trade services, the index also rose 0.2% on the month and 5.4% on the year. Excluding just food and energy, the index was flat on the month and up 6.7% on the year.

{snip}

Read more: https://www.cnbc.com/2022/11/15/wholesale-prices-rose-0point2percent-in-october-less-than-expected-as-inflation-eases.html

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Last month at DU:

Wed Oct 12, 2022:

Wholesale prices rose 0.4% in September, more than expected as inflation persists

https://www.democraticunderground.com/10142980409

-- -- -- -- -- --

The original OP is now the "From the source, the U.S. Bureau of Labor Statistics:" reply, https://www.democraticunderground.com/10142994914#post6

[mahatmakanejeeves]

1. PPI vs. CPI: Understanding The Producer Price Index And Consumer Price Index As An Investor

MONEY

PPI vs. CPI: Understanding The Producer Price Index And Consumer Price Index As An Investor

Q.ai - Powering a Personal Wealth MovementContributor
Making wealth creation easy, accessible and transparent.

Oct 25, 2022, 08:15am EDT

Key takeaways

• The PPI measures the change in selling prices received by domestic vendors and represents the cost of producing goods.
• The CPI measures the change in prices consumers pay for everyday items.
• Both reports influence the Federal Reserve when deciding whether to raise, lower, or hold interest rates.

The Producer Price Index and Consumer Price Index are two key indicators of the U.S. economy. In fact, one could make the case, these are the two most important reports released by the Bureau of Labor Statistics. Here is an explanation of how these indexes work, impact economic policy and influence investors.

What is the Producer Price Index?

The Producer Price Index (PPI) is a program overseen and published by the US Bureau of Labor Statistics (BLS). It tracks the wholesale selling prices that domestic manufacturers receive for their products and services. The prices collected represent the initial cost of a product or service as it reaches the market and tracks current pricing for around 10,000 products and services. This includes industries such as natural gas, agriculture, manufacturing, construction, retail, real estate, healthcare and more. The primary purpose of the PPI is to measure the change in prices producers receive for their goods and services.

The PPI uses samples from over 25,000 commercial entities that provide about 100,000 price quotations monthly. The businesses participate voluntarily in the program and are selected for the PPI by systematic sampling. The PPI undergoes regular resampling as market conditions and industries change.

{snip}

[JohnSJ]

2. The stock market doesn't seem bothered by it. Futures are up

[James48]

3. That's actually very good.

It shows a decrease on the services side- AND it’s less then the 8.7% previously. I expect by February and March- the oil price jump will have worked it’s way through the system, and price rises will flatten out a substantially.

[JohnSJ]

4. Yes. They believe interest rate acceleration is over

[mnhtnbb]

5. The stock market is actually encouraged by this better than expected report

Futures took a big jump: DJIA currently up almost 400 points

The produce price index, a measure of wholesale inflation, rose 0.2% for the month, versus the consensus estimate for a 0.4% increase from Dow Jones. The report comes after last week’s consumer price index data showed signs of inflationary pressure abating last month, sparking a sharp rally.

https://www.cnbc.com/2022/11/14/stock-futures-rise-after-falling-monday-fading-last-weeks-rally.html

[mahatmakanejeeves]

6. From the source, the U.S. Bureau of Labor Statistics:

PPI for final demand advances 0.2% in October; goods rise 0.6%, services decrease 0.1%

The Producer Price Index for final demand increased 0.2 percent in October. Prices for final demand goods advanced 0.6 percent, and the index for final demand services decreased 0.1 percent. The index for final demand rose 8.0 percent for the 12 months ended in October.

Economic News Release USDL 22-2176

Producer Price Index News Release summary
Transmission of material in this release is embargoed until 8:30 a.m. (ET) Tuesday, November 15, 2022

Technical information: [phone] * [e-mail] * www.bls.gov/ppi
Media contact: [phone] * [e-mail]


PRODUCER PRICE INDEXES - OCTOBER 2022


The Producer Price Index for final demand increased 0.2 percent in October, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.2 percent in September and were unchanged in August. (See table A.) On an unadjusted basis, the index for final demand advanced 8.0 percent for the 12 months ended in October.

In October, the rise in the index for final demand can be attributed to a 0.6-percent advance in prices for final demand goods. In contrast, the index for final demand services decreased 0.1 percent.

Prices for final demand less foods, energy, and trade services advanced 0.2 percent in October following a 0.3-percent rise in September. For the 12 months ended in October, the index for final demand less foods, energy, and trade services increased 5.4 percent.

Final Demand

Final demand goods: The index for final demand goods moved up 0.6 percent in October, the largest advance since a 2.2-percent rise in June. Most of the October increase can be traced to a 2.7-percent jump in prices for final demand energy. The index for final demand foods advanced 0.5 percent. Conversely, prices for final demand goods less foods and energy decreased 0.1 percent.

Product detail: In October, 60 percent of the increase in prices for final demand goods is attributable to the index for gasoline, which rose 5.7 percent. Prices for diesel fuel, fresh and dry vegetables, residential electric power, chicken eggs, and oil field and gas field machinery also advanced. In contrast, the index for passenger cars declined 1.5 percent. (In accordance with usual practice, most new-model-year passenger cars and light motor trucks were introduced into the PPI in October. See Report on Quality Changes for 2023 Model Vehicles at www.bls.gov/web/ppi/ppimotveh.htm.) Prices for gas fuels and for processed young chickens also fell. (See table 2.)

Final demand services: The index for final demand services fell 0.1 percent in October, the first decline since moving down 0.2 percent in November 2020. Leading the October decrease, margins for final demand trade services fell 0.5 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services moved down 0.2 percent. Conversely, the index for final demand services less trade, transportation, and warehousing increased 0.2 percent.

Product detail: A major factor in the October decrease in prices for final demand services was the index for fuels and lubricants retailing, which fell 7.7 percent. The indexes for portfolio management, long-distance motor carrying, automobile retailing (partial), and professional and commercial equipment wholesaling also moved lower. In contrast, prices for hospital inpatient care increased 0.8 percent. The indexes for services related to securities brokerage and dealing (partial), apparel wholesaling, and airline passenger services also rose.

{snip}

________________
The Producer Price Index for November 2022 is scheduled to be released on Friday, December 9, 2022, at 8:30 a.m. (ET).

{snip}

[IronLionZion]

7. Election is over

funny how that works out. Maybe gas prices will go lower next.

[onenote]

8. Are you suggesting that the Biden administration hid this news?

Or do you not understand that these are numbers for the month that preceded the election and that the schedule for the release of PPI data, which always occurs in the second week of the following month, is announced and published far, far in advance?

[IronLionZion]

9. Just the irony of good news for us coming out after people have voted

it could make a difference in the Georgia runoff.

[progree]

13. Long before the election, on Oct 13, the CPI increased at only a 2.0% ANNUALIZED Rate

over the previous 3 months, matching exactly the Federal Reserve's target inflation rate (though they use a different inflation yardstick).

(Clarification: October 13 was the date that the September CPI report was released).

CPI: https://data.bls.gov/timeseries/CUSR0000SA0

CPI: June: 295.33,   Sept: 296.76.   % increase: 0.484%. Annualized: 1.95%

but the media is fundamentally incapable of reporting anything besides the one month and the 12 months figures. No notion whatsoever that the first several months of the 12 month period are ancient history, but they drag the damn things along forever in their reporting.

Edited to add: "over the previous 3 months" in the first paragraph and the CPI numbers in June and September.

[IronLionZion]

14. Yep the "liberal" media has been disappointing

reporting on grocery and gas prices but not as much on jobs and wages and other important things.

[twodogsbarking]

10. Worldwide pandemic may have been a factor.

What did people expect?

[progree]

11. Last 4 months: The CPI increased 2.80% and the PPI increased 0.06% (both ANNUALIZED rates)

THE CPI

2.80% (annualized) is by far the smallest 4 month inflation figure since way back when. In the Jan-May 2021 period (May over January) it was 7.5% and never fell below 6% since then, until 2.8% June-Oct 2022 (October over June)

https://data.bls.gov/timeseries/CUSR0000SA0

and some spreadsheet work (JnkA).

How the 4 month inflation figures were calculated:

https://www.democraticunderground.com/?com=view_post&forum=1002&pid=17358410

THE PPI

0.06% (annualized) is by far the smallest 4 month inflation figure since way back when. In the Jan-May 2021 period (May over January) it was 10.50% and stayed above 6% until March-July 2022.

http://data.bls.gov/timeseries/WPSFD4

[Johnny2X2X]

12. That suggests we could get to 3% inflation much quicker than expected

And the Fed will most likely raise rates only by 50 basis points instead of 75 at their next meeting.

Bottom line, get into the equities markets if you aren't already. We're going to see the markets breaking records again very soon.