Staff Reports
It’s HAPPENING, folks! The inflation monster is RISING FROM THE DEPTHS and it’s ready to wreak havoc on the hardworking American people! In a shocking turn of events, the Producer Price Index for final demand, which measures the prices paid for goods and services produced by U.S. businesses, ROSE by a whopping 0.3 percent in January! Can you believe it? Well, maybe you can, because this is just the latest piece of evidence that confirms what we’ve all been feeling in our wallets – prices are going UP, UP, UP!
And Wall Street? They were expecting a TINY 0.1 percent rise, but NOPE, they were way off the mark. December saw a 0.1 percent RISE, November had a teensy 0.1 percent increase, and now, January’s surge has pushed the index up at the FASTEST pace since August 2023! We’re talking prices of goods and services going HAYWIRE, people!
It's a Scorcher: Producer Price Inflation Rips Higher https://t.co/GulW3HYREY
— kevin waterbury (@WaterburyKevin) February 16, 2024
But wait, it gets even crazier. The biggest drivers of this increase were the prices of SERVICES, which JUMPED a whopping 0.6 percent from the prior month – the BIGGEST advance since July 2023! And let’s not forget about the core producer prices – they rose a WHOPPING 0.6 percent, the biggest jump since January 2023! And as if that wasn’t enough, goods prices continued to DECLINE in January, falling 0.2 percent for the month. What on EARTH is going on here?!
So, what does this all mean? It means that the prices of goods and services received by domestic producers for personal consumption, capital investment, government use, and export are going through the ROOF. It’s like a FIREWORK show of price increases, and it’s NOT going to end anytime soon!
And listen to this – the inflationary surge indicated by the consumer price index this week was HIGHER than expected at 0.3 percent, with core CPI (which excludes food and energy prices) rising by 0.4 percent. Import prices, a leading indicator of domestic inflation, rose by 0.8 percent, defying forecasts for a decline. It’s like a TRIPLE WHAMMY of inflation hitting the economy!
Last year, the producer price index fell on a monthly basis three times, but each time, it BOUNCED BACK into positive territory. Inflationary pressures that started with a boom in consumer purchases and supply chain constraints in the goods sector have now shifted to services. And compared with a year ago, the producer price index is UP 0.9 percent, while core prices are UP a staggering 2.6 percent!
This has sent Wall Street into FRENZY, with major stock indexes selling off and bond prices declining, pushing up yields. There’s been a sharp decline in the odds of rate cuts in May and June implied by prices in the federal funds futures market. The Fed may have said they expect to cut interest rates, but they’re waiting for more data to be confident that inflation is on a path down to their two percent target.
So folks, hold on to your wallets, because this inflation train is not slowing down anytime soon! And now, we wait with bated breath for the next chapter in this nail-biting saga of rising prices and economic uncertainty!
