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Notes to myself, possibly of interest to others.
-- Bill Northlich

Wednesday, January 20, 2010

Inflation - Yes, via commodities.

Dec PPI rose .2% m/o/m vs expectations of flat ... A 1.2% drop in the wholesale price of light trucks weighed on the core reading.

Food prices rose by 1.4% but energy prices fell by .4%.

The y/o/y gain now with headline PPI is 4.4%, the most since Oct ‘08...

Core PPI is up .9% y/o/y.

...inflation in the pipeline is still running hot. Intermediate goods prices rose .5% m/o/m both headline and core and crude prices (initial stage of production) rose 1% headline and 5% core (yes, m/o/m).

...Bottom line, with respect to inflation going forward or lack thereof, it won’t come from the historical viewpoints of the output gap and the unemployment rate (thus wage pressures), it will be led by commodity prices, therefore headline inflation should be the accurate measurement.

Peter Boockvar via Barry Ritholtz, 1/20  (my bold)

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