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Inflation is taking a ride in the backseat, again. The Labor Department said that July’s wholesale inflation measured by Producer Price Index came in at -0.9% on the nominal or headline rate, while the ex-food and energy Core PPI came in at -0.1%.
We had penciled in target consensus figures of -0.3% to -0.4% on the headline number and had penciled in +0.1% expected on the core reading.
This is important to see because the producer side of the economy tends to lead the consumer side of the reports. If wholesale inflation continues for several months, then consumer inflation often comes behind it. But no inflation for producers and a weak economy is good news for what prices Joe Consumer will have to pay.
JON C. OGG
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