CAT - PPI Report Live: Producer Price Inflation Report Is Out Here's What It Shows

2023-04-13 07:37:15 ET

Updated: April 13, 2023, 7:37 AM ET

Another week of economic data is moving large caps and penny stocks alike this week. Wednesday’s CPI Inflation Report for March showed some signs that inflation was easing for the U.S. consumer. However, the Core number remained a sticking point for some. Comments from several Fed speakers, including Mary Daly and Thomas Barkin, brought more into the mix as investors try to gauge what the central bank is thinking about its next rate hike decision.

“We had some good news today on the CPI. Headline release showed that it’s going down, it’s going in the right direction, but it’s still elevated. It’s not consistent with price stability. And I’m going to be looking specifically in the CPI and in our other measures to see if core services are coming down and really core services minus housing.,” explained San Francisco Fed President Mary Daly on April 12th.

Meanwhile, President Barkin’s comments remained a bit more focused on the Core CPI data specifically. In an interview with CNBC, Barkin said, “I put particular focus on the core, which is still running a little over 5% year over year. And you know, we had some good news on energy, but there’s still more to do, I think to get core inflation back down to where we’d like it to be.”

Barkin also said it would be hard to make a case that inflation is “compellingly” headed toward the Fed’s target.

Fed Comments In Focus

Yesterday’s Fed meeting minutes from the March meeting also gave clues that the staff may actually be expecting some type of recession this year, which is a different tone than in previous meetings.

In particular, the Fed minutes highlighted this in the statement:

“Given their assessment of the potential economic effects of the recent banking-sector developments, the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years.”

With PPI inflation data on deck, eyes will be glued to see what Core vs overall producer prices are reflecting ahead of the next FOMC meeting in May.

Let’s go over some of the basics for those who may not be familiar with and are asking questions like:

• What is PPI in economics?
• PPI Inflation Data vs. CPI Inflation Data & Why PPI data matters to the stock market today
• How can PPI inflation data be used in your investing and trading strategy?; and lastly
• What are the results of the January PPI inflation report?

What are the results of the September PPI inflation report?

What Is PPI Inflation Data & What Is The PPI Report?

PPI is “a measure of the average change over time in the selling prices received by domestic producers for their output is what has defined the producer pricing index,” according to the U.S. Bureau of Labor Statistics. “The prices included in the PPI are from the first commercial transaction for many products and some services.”

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PPI vs. CPI: Why Does PPI Matter?

The Produce Price Index inflation data matters because it is a data point for investors to understand future inflationary tendencies. It can also be used as a means for enacting monetary policy.

CPI Data V.S. PPI Data

Compared to CPI data, Producer Prices in the PPI report show a picture from the lens of companies producing final products, what their input costs are, and give a glimpse into whether or not prices could trigger a jump or drop in retail costs that consumers incur.

PPI Expectations March 2023

Let’s look at PPI expectations for March 2023. The year-over-year PPI estimates for March are set at 3%. This would be less than the 4.6% PPI readout from the last Produce Price inflation report. The month-over-month figures are likely to be the most telling sign for the market. Estimates put this at 0.1% for March. Core PPI inflation expectations are 0.3% month-over-month and 3.4% year-over-year.

The Producer Price Index Report For March 2023 & PPI Numbers

This is a developing story and will be updated when PPI data is released at 8:30 AM ET.