It’s clearly difficult for inflation to be transitory when it keeps increasing at a record pace, according to the latest date from the Labor Department…(BLS)
- M-O-M: The Producer Price Index increased 0.8% in November when compared to October 2021.
- Y-O-Y: The PPI increased 9.6% in November when compared to November 2020. This is the largest advance since 12-month data were first calculated in November 2010.
Core PPI was up 0.7% month-over-month while the annual growth was 6.9% which is the largest advance since 12-month data were first calculated in August 2014.
- Economists had predicted a smaller monthly gain (+0.4%) but a bigger annual increase (+7.2%).
NOTE: Demand for goods continued to be the bigger driver for producer prices with a 1.2% increase for the month, a touch slower than the 1.3% October increase. However, final demand services inflation ran at a 0.7% monthly rate which is a big jump from the 0.2% reported in October.
Mohamed A. El-Erian, chief economic adviser at Allianz, said that this data is more evidence that the Fed needs to go beyond a doubling of the amount by which it reduces monthly asset purchases… (Twitter)
- “The Fed has a simple choice this week. It can either continue with its gross mishandling of inflation or, instead, start regaining credibility and its control of the narrative on inflation and monetary policy.“