Producer Prices Are Running 2 Points Ahead of Your Receipts

Producer prices jumped 0.4% in August on top of a 5.4% rise over the year, per the PPI final demand index published by the Bureau of Labor Statistics on Sep 10, and the gap between what producers now receive and what households currently pay at 3.4% CPI is the cost-of-living story of the fall. The index sits at 157.411, seasonally adjusted, its highest in the series history, and the composition of the rise matters more than the headline. Goods prices rose 0.3% on the month, but the core measure that strips food, energy and trade services rose 0.88% in one month and 6.44% over the year. That is the pipeline heating up underneath a checkout that has not caught up yet.

Key Takeaways The PPI fina…