Producer Price Index Posts Modest Increase, Hinting at Downward Trend for Inflation

Article originally posted on HERE on November 21, 2022

The producer price index (PPI) increased by a seasonally adjusted 0.2% in October, the Bureau of Labor Statistics said Tuesday. The 0.2% rise, a smaller increase than Wall Street analysts expected, followed last week’s report of a monthly increase in the consumer price index that also came in below estimates.

The PPI reading marked the fourth consecutive month of a modest increase, according to BLS data. Monthly increases peaked at 1.9% in March.

Year over year, the PPI rose 8% in October compared to an 8.4% increase in September and the all-time high of 11.7% in March. The stock markets rose following the PPI announcement, as they did following the CPI announcement.

“The PPI read certainly adds more fuel to the fire for those who feel we may finally be on a downward inflation trend,” Mike Loewengart, head of model portfolio construction at Morgan Stanley’s Global Investment Office, told CNBC.