Flashing Alarm Bells Go off, as Another Inflationary Measure Hits Record High – Opinion

When it comes to inflation, we hear much about the consumer price indicator (CPI). But there’s another number that’s important — that’s the producer price index (PPI) which measures inflation from the perspective of costs to industry or producers of products. Because it’s measuring the costs to the producers of the products before they get to the consumers, it’s often thought of as an earlier indication of where inflation is going than is the CPI.

Unfortunately, today’s news about the PPI numbers does not look good.

In November, wholesale prices rose 9.6 per cent over the last 12 months. It was 9.2 percentage. That’s the biggest annual gain on record.

Producer Price Index (PPI), 9.6% y/y was recorded, which is higher than Oct’s 9.2% estimate and October’s 8.8%. A new record. There have been strong gains across all types. In 2021, we started with a low PPI of 2% and are now at almost 10%. pic.twitter.com/IhMz8iv0F0

— Liz Young (@LizYoungStrat) December 14, 2021

CNBC

The core PPI was 6.9% in June, the highest gain since records began. According to estimates, there were gains of 0.4% (and 7.2%) for the month. However, the annual increase was slower than the estimate but it was still higher than the previous year. [….]

These numbers show that headline consumer prices are at an all-time high of nearly 40% and core inflation is at its highest level in over 30 years.

Producer prices rose 1.2% in October, slightly slower than the 1.3% increase recorded for October. The 0.7% rate of final demand services inflation was much higher than that 0.2% October rate. This is a signal that prices could catch up after being slow through most of the recovery.

So Biden claiming that it’s transitory or it’s going away isn’t living in reality. Unfortunately, this indicates that it’s going to continue and likely to get worse because it’s still going up. But it’s another indicator of the cold hard facts that the Biden team doesn’t want to face.

It’s things like this that Sen. Joe Manchin (D-WV) is looking at when he’s trying to judge Biden’s Build Back Better bill, and this is going to make him even more concerned than he has been. He already said the numbers were “very sobering” yesterday and that was before the PPI came out.

Biden’s numbers on inflation were already horrifically bad, and this is only going to reinforce that to Americans.

According to the ABC/Ipsos poll taken between December 10-11, more than two in three — 69 percent of Americans — disapprove of Joe Biden’s handling of inflation, with only 28 percent approval — an incredibly low number. Fifty-seven percent disapproved of Biden’s handling of the economic recovery.

Inflation is hitting Americans hard, they’re laying it at Biden’s feet, and the PPI indicates that it’s just going to get worse.