U.S. Producer Price Index Rose 0.4% In October

(For October 2010)

U.S. producer price index rose 0.4% in October vs. 0.8% consensus. September reading was also at 0.4%. On year level PPI is up 4.3%.

Chart 1. U.S. Producer Price Index

Food & energy taken out U.S. producer price index fell 0.6% in October. The consensus and prior reading were at 0.1%. On year level core PPI is up 1.4%.

Chart 2. U.S. Producer Price Index – Core

This is quite negative for company margins: rising commodity prices increase expenses (as depicted by rising PPI) while weak demand erodes pricing power(as depicted by falling core PPI). If it continues this could be the first unintended consequence of QE that adversely effects the economy.

This entry was posted on Tuesday, November 16th, 2010 at 7:56 am and is filed under U.S. Economic Data. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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