PPI Neutrality… No Inflation; No Deflation

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The Labor Department’s Bureau of Labor Statistics has just released the December 2011 producer price index as a measurement of wholesale inflation in the United States.  The December figure came to -0.1% on the headline PPI and was +0.3% on the core (ex-food and energy).

Bloomberg had a consensus reading of 0.0% on the headline figure and +0.1% on the core PPI reading.  This is a low enough figure that it will keep the inflation hawks at bay and it will also manage to keep the deflation camp muted for the most part.

We would not expect much market impact in the stock futures nor in the bond futures as a result of this month’s PPI reading.

More important is that this will set the tone for a muted consumer price index reading at 8:30 AM EST on Thursday.  The Bloomberg consensus targets for December CPI are +0.1% on the headline CPI and +0.1% on the core (ex-food and energy) CPI.