Inflation Resumes Uptrend

from Zero Hedge:

Following a big drop in June energy prices, which pushed the broader PPI to a one year low sequential change of -0.4%, the PPI is once again in an uptrend, rising by 0.2% in July, higher than consensus of 0.1%. Core PPI was higher by 0.4%, following the 0.3% increase in June, and double consensus of 0.2%.

Tripple Whammy of Bad News

Not to worry. Wall Street still has its Pollyanna complex.That moving average is not headed in the right direction (see below).

Double Whammy - Jobless Claims Rise, PPI Rises to Eye-Brow-Raising Levels

Wrong direction! It's no wonder stocks are down again.

PPI Up .8%, Housing Starts Rises

from Zero Hedge:

The PPI including food and energy came at 0.8%, in line with expectations, and a decline from the previous 1.1%. Ex food and energy, Producer Prices jumped from 0.2% to 0.5%, and over 100% higher than expectations of 0.2%. Somehow, food PPI increased by just 0.3%, the lowest since August, and once again making one wonder which Department of Truth is more unbelievable: ours or the Chinese. From the release: The Producer Price Index for finished goods rose 0.8 percent in January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This advance followed increases of 0.9 percent in December and 0.7 percent in November and marks the seventh straight rise in finished goods prices. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 1.1 percent, and the crude goods index rose 3.3 percent. On an unadjusted basis, prices for finished goods advanced 3.6 percent for the 12 months ended January 2011.... The index for finished consumer foods moved up 0.3 percent in January, the fifth consecutive monthly increase. A 13.7-percent advance in prices for fresh and dry vegetables was the main factor in the January rise in the finished consumer foods index...In January, the index for intermediate foods and feeds moved up 0.4 percent for the second consecutive month. A 2.7-percent rise in beef and veal prices accounted for about forty percent of the January increase in the intermediate foods index.

PPI Rose 1.1% In December

U.S. producer prices climbed 1.1% in December after a 0.8% rise in November

Stock Futures Higher, Shrug Off Bad News

Jobless claims are higher, the trade gap worsens, and inflation is rising! Ignore the news and buy stocks! Sounds very bubbly!

PPI Surprises, Up 4.1%

U.S. producer prices rose slightly more than expected in August as energy prices recorded their first increase since March, government data showed on Thursday, calming fears of deflation for now.

The Labor Department said the seasonally adjusted index for prices paid at the farm and factory gate increased 0.4%, the largest increase in five months, after gaining 0.2% in July.

Analysts polled by Reuters had expected producer prices to rise 0.3% last month. In the 12 months to August, producer prices increased 3.1%, slowing from the prior month's 4.2% increase.

Producer prices last month were bumped up by a 2.2% jump in energy costs. Gasoline prices surged 7.5%, the largest increase since January, after falling 2.2% in July. Food prices fell 0.3% after rising 0.7% in July.

Tame, But Rising, PPI and Inflation

U.S. producer prices rose in July for the first time in four months, pulled by higher prices for food and consumer goods, a U.S. government report showed on Tuesday.

The Labor Department said the seasonally adjusted index for prices paid at the farm and factory gate rose 0.2%, in line with Wall Street analyst

expectations, after dipping 0.5% in June.

In the 12 months to July, producer prices increased 4.2% after rising 2.8% in May. The year-on-year increase was also in line with forecasts.

PPI Ramps Up Again in March to .7%

WASHINGTON (AP) -- Wholesale prices rose more than expected last month as food prices surged by the most in 26 years.

The Labor Department said the Producer Price Index rose by 0.7 percent in March, compared to analysts' forecasts of a 0.4 percent rise. A rise in gas prices also helped push up the index.

Still, there was little sign of budding inflation in the report, which measures price changes before they reach the consumer. Excluding volatile food and energy costs, wholesale prices rose by 0.1 percent, matching analysts' expectations.

Food prices jumped by 2.4 percent in March, the most since January 1984. Vegetable prices soared by more than 49 percent, the most in 15 years. A cold snap wiped out much of Florida's tomato and other vegetable crops at the beginning of this year.

Gasoline prices rose 2.1 percent, the department said, the fifth rise in six months.

In the past year, wholesale prices are up 6 percent, with much of that increase driven by higher oil prices. But excluding food and energy costs, they have risen only 0.9 percent.

Consumers are facing smaller price increases, as many retailers are reluctant to pass on higher costs. Last week, the Labor Department said the consumer price index rose only 0.1 percent in March. Excluding food and energy, the core consumer index was unchanged.

PPI Surprises at 1.4%

That's 16.8% annualized! Ouch!

PPI Surprises at 1.4%

That's 16.8% annualized! Ouch!

PPI Raises Inflation Concerns

This is going to be tough on businesses, and could increase bankruptcies, as businesses are unable to pass on higher inflation costs to consumers because of the recession.

WASHINGTON (MarketWatch) -- U.S. producer prices rose 1.8% in June, eclipsing economists' expectations and climbing by the most since November 2007, the Labor Department reported Tuesday.

Excluding volatile food and energy price inputs, producer prices were up by just 0.5% last month.

Still, this so-called core rate also outstripped economists' expectations: Analysts surveyed by MarketWatch had the adjusted PPI rate for June to rise by 0.1%.

Economists had pegged overall producer prices, which tracks inflation at the wholesale level, to have risen by 1.2% in June, from 0.2% in May.

Energy prices soared at the producer level in June, rising by 6.6%. In May, they were up 2.9%, on the heels of having fallen by 0.1% in April.

Prices for gasoline, home heating oil and liquefied petroleum gas all spiked in June, the data showed.

Food prices rose by 1.1% in June, a reversal after falling by 1.6% in May.

In spite of the overall June increase, producer prices are off 4.6% over the past 12 months.

Over the past year, however, core PPI prices are up 3.3%.

In June, prices for intermediate goods rose 1.9%. Further back in the production pipeline, prices for crude goods climbed by 4.6%.

Economists and investors have kept a sharp eye out for signs of inflation creeping into the U.S. economy, in light of the massive stimulus measures adopted by Washington several months ago.

Also Tuesday, the government reported that U.S. retail sales increased by 0.6% in June, marking the best monthly performance since the 1.7% growth seen last January.

Inflation is Back... On Import Prices!

from Bloomberg:
Prices of goods imported into the U.S. rose in June for a fourth straight month as oil costs jumped by the most in a decade.

The 3.2 percent gain in the import price index followed a revised 1.4 percent increase the month before that was larger than previously estimated, according to a Labor Department report today in Washington. While prices excluding fuels rose 0.2 percent, they were down a record 6.5 percent from June 2008.

Rising commodity costs will hurt company profits because the worst recession in half a century has made it difficult for businesses to pass on expenses to customers. Projections for a slow economic recovery and sluggish job market indicate inflation pressures will continue to be subdued.

“You can’t ignore the amount of slack in the economy,” Ellen Zentner, senior U.S. macroeconomist at Bank of Tokyo- Mitsubishi UFJ Ltd. in New York, said before the report. Referring to Federal Reserve policy makers, she said, “how much can they let the possibility of a resurgence in inflation sway them when they’re starting at such a high unemployment rate and such low capacity utilization?”

Inflation Surprise! PPI Jumps Higher by 0.8%, 0.4% Core!

PPI has jumped unexpectedly higher today. Only 0.1% increase was expected. We must keep in mind that this figure is for a single month, so I often will multiply the PPI or CPI reported figure by 12 to obtain a realistic expected of an annual inflation rate. This PPI figure will reignite concerns that the Fed is starting to fuel inflation. This is very significant. It also suggests that in the future, hard assets will be the investment of choice. Wow! This is a big surprise! Gold is beginning to take off again!

Wholesale Inflation Explodes!

Stock futures have plunged to triple-digit losses on the Dow this morning pre-market as wholesale inflation has surprised even the most pessimistic prognosticators. July PPI inflation reached 1.2%, showing that contrary to the Fed's expectations, inflation continues to accelerate higher. This is the highest inflation rate in 27 years! Annual inflation thus far has reached more than 8%, but the monthly figure suggests that the annual inflation figure is accelerating. While the wholesale inflation rate is often discounted by the markets, it is very significant because it is a leading indicator of what is coming down the road for consumer inflation! In fact, even the core inflation rate burgeoned to a rate of more than 8% on an annualized basis. The real inflation rate is about twice the reported figure. That bites! And it hurts!

Inflation: PPI 9.2%

Year over year wholesale inflation continues to gather steam and head higher. At 9.2%, inflation is far from defeated. While the Fed may choose to ignore the effects of its monetary policy, wholesale buyers can't! As manufacturers begin to increase their prices, consumers will begin to see even higher inflation this fall and winter. Inflation is rearing its ugly head, and its getting more and more bold with each peek out from behind its hiding place!

PPI Inflation 7.2%

PPI continues to increase inflation concerns, but with the CPI last week appearing relatively tame, stock index futures are ignoring the inflation data and moving higher. We need to keep in mind, however, that producer prices take 6-9 months to reflect in the CPI. Thus, the worst inflation may be yet to come.

I have noticed over time that stock traders like inflation because it create the illusion of prosperity, and the corporations don't need to do anything to earn that illusion. It drives the stock market higher, and no one cares. Stock price inflation is not only accepted. It's welcomed!

Stocks Fall When Inflation Reaches 6.5% Yearly

PPI this morning has reached 6.5% year over year, and stock index futures are plunging as a result. Gold and crude oil are consequently rising modestly, as this stocks the fears of greater inflation ahead.

T. Boone Pickens, the famous Texas oilman who, six months ago, predicted that the price of oil would go down temporarily until the summer, has reversed his prediction. On CNBC earlier this morning, he predicted that oil would reach $150/barrel this year. Remember that Goldman Sachs last week predicted $141 oil this summer. He bases his prediction on that fact that the world is consuming 87 million barrels of oil a day, and the world supply is only 85 million barrels. He said that demand decay is beginning to occur due to the cost, and that the balance of the supply shortfall is coming from inventories.

PPI: Up 6.9% Year Over Year

March PPI was up 1.1%. That's much hotter than expected. If it sounds low, just multiply the number by 12 months to get an annual figure. Ugh! Crude goods up 8%, as the cost of food and energy is bleeding into the cost of finished goods. Energy inflation for one month (March) was 2.9% (multiply that number to a yearly figure). And oil is higher this month than last, suggesting that inflation will be even higher next month.

Core was restrained to 0.2%. No surprise there, since the government ignores food and energy costs. Treasuries are selling off in response.

Higher food costs are causing price riots around the world, inflation is raging even in countries with strong currencies (like Europe, Australia), but our government continues to try to persuade us that inflation is contained here.

There is a widespread myth that higher commodity prices are being driven by speculators. In a recent article on seekingalpha.com, the case was made that COT reports from the CFTC indicate just the opposite -- that speculative interests in the commodities markets are flat over the last year. Of more than 3000 funds in existence, only about 50 have been buying commodities, with very little change year-over-year. COT reports show that it is commercials -- companies who hedge and take physical delivery of commodities -- that are increasing their long positions in the commodities markets.

How Much Will the Dollar Buy at Current Inflation Rates?

Here is an interesting article that calculates how much less the US Dollar will buy at current rates of inflation based upon the CPI and PPI. Read it and weap! The above chart is a glimpse. Read the article for the details:

Inflation's Power: The Dollar in 25 Years!