No, we’re not going to jump to conclusions. But neither can we dismiss this morning’s producer price report for September.
PPI last month rose by an aggressive 1.1%, the highest since February’s 1.2%. Yes, looking at recent history it’s clear that PPI’s monthly pace has been higher as well as lower. And, of course, PPI is a volatile data series and subject to dramatic revisions. (Gee, where have we heard that one before?).
Nonetheless, it’s hard not to notice the worrisome trend in PPI now unfolding, as our chart below illustrates.
On a 12-month rolling basis, the annual pace in PPI is moving up (again) too. The 4.4% rise for the year through last month is the highest in more than a year. The recent reprieve in wholesale pricing pressure appears, for the moment, to be over.