Producer Price Index Hits 11-Year High

The producer price index slightly slowed but continued to climb higher in August, according to the latest data from the Bureau of Labor Statistics…(BLS)

  • M-O-M: The Producer Price Index for final demand increased 0.7 percent in August. Slightly lower than the 1.0% increase in July, but slightly higher than the 0.6% projected by economists.
  • Y-O-Y: The final demand index rose 8.3% when compared to August 2020. This is the largest advance since 12-month data were first calculated in November 2010 and the eighth consecutive advance.

CORE PPI: Was up 6.7% in August which was slightly higher than the 6.6% economists had projected.

Prices for final demand services moved up 0.7 percent in August…

  • Over 30% of the August increase can be traced to a 7.8% rise in margins for health, beauty, and optical goods retailing.

The index for final demand goods moved up 1.0% in August…

  • About 25% of the August increase can be attributed to an 8.5% rise in the index for meats.

ANALYSIS: Althea Spinozzi, Senior Fixed Income Strategist at Saxo Bank, said on Twitter, “If this isn’t a sign of a policy mistake ahead of us, than what is it?” She argued that everything is pointing to aggressive bond tapering.