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Ladies and Gentlemen – Inflation Is In The House!

December 15, 2009 12:39 pm

Economics were back on the front burner today as the Empire Manufacturing Index came out VERY soft. It was estimated that it would increase to 24 from 23.51. The actual number was disappointing 2.55. (Yes the decimal is in the correct place) This is showing an almost stoppage of production in the region as opposed to andrew_on_twitterlast month. The most recent Richmond Fed also came in lower than expected and on the 17th of this month we will see if the Philly Fed provides a final confirmation of the reversal in manufacturing and business conditions.

Empire 20091215

More interesting was the Producers Price Index that came in much hotter than anticipated. We look to this as a precursor to inflation as it provides us the monthly information of the prices for goods at the wholesale level.

PPI Breakdown 20091215

Expectations were for a 0.8% increase on a Month-over-month basis. The actual number was 1.8%. Ex food and energy it still came in double the rate that was expected at 0.5%. PPI MoM 20091215To give the full picture, on a year-over-year basis, the PPI increased 2.4%.

PPI YoY 20091215

More detail on PPI versus CPI…

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Written by Andrew Horowitz · Category(s) Economy, MarketMash, Markets    |  Tags: • •   

6 Responses to “Ladies and Gentlemen – Inflation Is In The House!”

  1. Greg on December 16th, 2009 2:55 am

    Do you mean stagflation?

  2. Andrew Horowitz on December 16th, 2009 3:30 am

    That too-

  3. FOMC Statement and Outlook – The Nittty Gritty Compared : The Disciplined Investor on December 16th, 2009 2:35 pm

    [...] the PPI numbers announced yesterday showed a surprising increase in inflationary pressure at the wholesale level, today’s CPI was [...]

  4. Economics We are Watching – Leading and Philly : The Disciplined Investor on December 18th, 2009 10:15 am

    [...] seen in the in the Empire State and the Richmond Fed reports. Not that that tells us much, but we should watch to see if this is a one off or start of a trend [...]

  5. TDI Podcast 140: Bernanke and The Fed Control America : The Disciplined Investor on January 3rd, 2010 1:47 pm

    [...] Ladies and Gentlemen – Inflation Is In The House! [...]

  6. Market and Economy on January 4th, 2010 3:11 pm

    Economics of the Day: Rumor Mill was WAY OFF, But Inflation is Here…

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