Tuesday, March 18, 2008

PPI for February remains high

The Bureau of Labor Statistics released the PPI numbers today. PPI took a back seat to Lehman and Goldman’s earnings, the rate cuts, and the resurgent stock market.



PPI rose 0.35% (4.15% annualized) over last month and 6.75% year over year. Core PPI rose 0.55% (6.59% annualized) over last month and 2.49% year over year. PPI has paused around the 7% range. Core PPI has surged in the last two months. It will be important to see what happens with inflation if we are entering in a recession. Often a slowdown will lead to a drop in inflation. However, this time around international pressures like the surging inflation in China and the hot commodity prices may keep the pressure on.


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