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Producer inflation is below zero now

Yesterday was CPI day, which means today is PPI day. Here is the producer price index through March:

Since last June, headline PPI has risen at an annualized rate of 0.7%. Core PPI has risen at an annualized rate of 2.6%.

Both the headline and core PPI rates are considerably lower than the CPI rates. Since lower producer prices eventually feed through to consumer prices, it means there's still downward pressure on CPI. In addition, the shelter index will begin to drop later this year. Unless there's another energy spike, CPI is likely to drop to 2-3% by the end of summer.

UPDATE: I am forgetful these days. Here's the PPI for the dreaded services sector, down almost to zero.

5 thoughts on “Producer inflation is below zero now

    1. MattBallAZ

      Yup.
      >Since lower producer prices eventually feed through to consumer prices
      I don't think that is necessarily the case any longer.

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