Before last Friday’s Consumer Price Index release for the month of November — in which the inflation that Americans faced rose to a 12 month high that has not been seen since the year of 1982 — the Producer Price Index busted right through its all-time record high when it came in higher than it was expected to.
“The Producer Price Index for last demand went up by 0.8 percent in the month of November,” as the Bureau of Labor Statistics says, and “the final demand index increased by 9.6 percent for the 12 months that ended in November, the biggest advance since the 12-month data records were first added up in November 2010.”
Another massive downside surprise on inflation this morning, with the Producer Price Index coming it at 9.6% year-on-year, the highest level on record. As we saw in the Carter years, inflation is very painful to stop once it starts to run away. https://t.co/IQnqEpH4tU
— Senator Bill Hagerty (@SenatorHagerty) December 14, 2021
It looks like Biden and his administration are completely set on attempting to beat Jimmy Carter’s record for pain on the economy.
As Liz Young —the woman who leads the strategy for investment at SoFi —described in context, November’s numbers not only beat a 9.2 precent expected estimate coming in at 9.6 percent, but also there was a significant increase in November’s PPI from where it began this year when PPI was below 2 percent year-over-year.
Producer Price Index (PPI) came in at 9.6% y/y, higher than the estimate of 9.2% and Oct's 8.8%. New record high. Strong increases across all categories. We started 2021 with PPI below 2% y/y and now we're nearly at 10%. pic.twitter.com/IhMz8iv0F0
— Liz Young (@LizYoungStrat) December 14, 2021
The PPI data from November yet again debunks the claims from President Biden and the White House that say inflation is somehow not going to last or is improving because of an action by President Biden. Instead, it implies that President Biden’s policies for the economy continue to cause destruction on the American economy at many different levels.
“With energy, food, and trade services excluded, prices have went up by 0.7 precent for this month, this puts core PPI at 6.9 precent which is the highest gain that has been recorded,” explained by a CNBC’s report on the data. “Respective gains were estimated to be 0.4% and 7.2%, this means that the gain for the month was faster than what was estimated however the year-over-year measure was a little bit slower.”
Due to the PPI measuring inflation upstream from consumers, the most recent numbers suggest that the CPI will most likely continue to go upward for the month of December.
The November PPI (producer price index) rose 9.6% year/year – the highest level of inflation on record and higher than the expectations.
The PPI "core" number also beat expectations, up 7.7% year over year compared to a 7.2% expectation.
Those costs will be passed to consumers.
— Josh Jordan (@NumbersMuncher) December 14, 2021
Author: Steven Sinclaire