Following yesterday's hotter than expected surge in consumer prices, all eyes are on producer prices this morning as headline PPI rose 0.4% MoM (more than the 0.3% exp) in January, but December's 0.2% MoM rise was revised dramatically higher (to +0.5% MoM). Between the hot headline and upward revisions, headline PPI rose 3.5% YoY (+3.3% exp) - the hottest PPI since Feb 2023...

That is the 13th straight month without a MoM decline in producer prices.

2024's PPI data has been serially revised higher with December's the biggest upward revision since Dec 2021...

Core PPI also rose more than expected (+0.3% vs +0.2% exp) which dragged prices (ex food and energy) up 3.6% YoY...

Under the hood, Goods costs rose at double the pace of Services....

Energy deflation is over...

...but will energy deflation return next month?

None of this is a good sign for bullish micro investors (margins compressed)...

...or bullish macro investors (doves crucified once again on the cross of transitory).

So much for&nbsp;Fed Chair Powell's comments this week that inflation expectations “appear to remain well-anchored” and central bankers have scope to be patient with rate adjustments...

....headline PPI hot and large upward revisions...
{ai:summary}Producer prices rose 0.4% month-over-month in January, exceeding expectations, while December's increase was revised from 0.2% to 0.5%. Year-over-year, the headline PPI increased 3.5%, marking the hottest reading since February 2023, with no month-over-month declines for 13 consecutive months.Core PPI also outpaced expectations, rising 0.3%, contributing to a 3.6% annual increase. Notably, goods costs surged at a faster rate than services, with significant increases in energy prices. This trend raises concerns for investors as inflation pressures persist, challenging previous assumptions about inflation stability. #economy

Producer Prices Surge At Fastest Pace In 2 Years As Energy 'Deflation' Ends

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