The PPI number came in really hot yesterday, printing a 10% year over year number.
But...
My guess is that so long as we have commodities dropping like this we'll start to see that number come down in the coming months.
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2 comments:
Indeed. There was definitely lag in these statistics from the get go when oil prices and such were skyrocketing but the PPI wasn't going up. This makes sense though when you consider that large manufactures make various hedges to keep costs predictable.
Now, after such a long period of time with high prices, those hedges have run out and producers are paying higher prices. So I expect PPI will still be high for a bit, but will come down as the commodity prices decline.
Here's why you might be wrong: the biggest component of costs is labor. US labor costs have been subdued-- comatose, one might say. But since we are so heavily dependent on imports, the labor cost that matters is that of foreign labor. And they still have some pricing power.
--Charles of MercuryRising
www.phoenixwoman.wordpress.com
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