Producer Price Index (PPI)

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The Producer Price Index (PPI) came in higher than expected:

  • Expectations: 7.2%
  • Actual: 7.4%

Producer Price Index (PPI) came in above estimates on both headline (7.4% vs 7.2% estimate) and core (6.2% vs 5.9% estimate), comments Liz Young, Chief Investment Officer, SoFi. The Producer Price Index measures inflation at the wholesale level, which acts as kind of a leading indicator.

Inflation remains high, but is trending down, because the main driver of inflation is not interest rates. Instead, the main driver of inflation is excessive fiscal deficit spending and loose monetary policy.

Although, PPI is still falling moderately on a year-over-year basis, but any future upside surprises don’t bode well for upcoming Consumer Price Index (CPI) numbers which will be released next week.

The Producer Price Index (PPI) measures the change in the price of goods sold by manufacturers. It is a leading indicator of consumer price inflation, which accounts for the majority of overall inflation.

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