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Core Producer Inflation Drops By Most In 9 Months

Tyler Durden's picture




 

Producer Prices in the US (less the all important food and energy - which no on uses) fell 0.2% month-over-month - the biggest drop since July 2013 - and missing expectations of a 0.1% rise. This is only the third month of 'disinflation in the last 18 months. Perhaps even more relevant is the dramatic slowdown in prices for final demand services which dropped 0.3% (the biggest drop since May 2013) and equal slowest rise year-over-year since the 'recovery' began.

Core PPI (ex food and energy)...

 

And Final Demand Services PPI rose at the slowest pace since the recovery began...

 

Final demand broken down by components:

Via The BLS,

The index for final demand services moved down 0.3 percent in February, the largest decrease since a 0.4-percent decline in May 2013. Most of the February drop can be traced to margins for final demand trade services, which fell 1.0 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.)

 

Prices for final demand transportation and warehousing services declined 0.2 percent. Conversely, the index for final demand services less trade, transportation, and warehousing inched up 0.1 percent in February.

And the explanation:

Final demand services: The index for final demand services moved down 0.3 percent in February, the largest decrease since a 0.4-percent decline in May 2013. Most of the February drop can be traced to margins for final demand trade services, which fell 1.0 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services declined 0.2 percent. Conversely, the index for final demand services less trade, transportation, and warehousing inched up 0.1 percent in February.

 

Product detail: Over 80 percent of the February decrease in the index for final demand services can be attributed to margins for apparel, footwear, and accessories retailing, which fell 9.3 percent. The indexes for airline passenger services; machinery, equipment, and related parts and supplies wholesaling; food and alcohol retailing; automotive fuels and lubricants retailing; and brokerage compensation for residential property transactions also declined. In contrast, the indexes for both inpatient and outpatient hospital care; health, beauty care, and optical goods retailing; and the U.S. Postal Service moved higher in February.

 

Final demand goods: Prices for final demand goods climbed 0.4 percent in February, the same rate of advance as in each of the prior two months. Leading the broad-based increase in February, the index for final demand goods less foods and energy rose 0.2 percent. Prices for final demand foods and final demand energy also moved higher, 0.6 percent and 0.5 percent, respectively.

 

Product detail: A major factor in the February advance in the index for final demand goods was prices for pharmaceutical preparations, which rose 0.9

percent. The indexes for dairy products, residential natural gas, liquefied petroleum gas, soft drinks, and eggs for fresh use also increased. Conversely, gasoline prices fell 1.1 percent in February. The indexes for processed poultry and for soaps and detergents also decreased.

Or, in brief, snow. Or something.

Charts: Bloomberg

 

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Fri, 03/14/2014 - 08:45 | 4547185 Cursive
Cursive's picture

This will be spun as bullish because....

Fri, 03/14/2014 - 08:52 | 4547224 Cursive
Cursive's picture

Sure enough:

 

zerohedge

@zerohedge   This is not a joke - actual headline from CRT: PPI ‘Big Miss’ Easier to Dismiss As Services Now Count. Remember: only good news counts 12:49 p.m. Fri, Mar 14

Fri, 03/14/2014 - 08:55 | 4547236 wallstreetapost...
wallstreetaposteriori's picture

Its called a "recession" .... when did america get so fucking stupid that it thinks recessions are good things... I persoanally blame American Idol and Mcdonalds...... and BHO.

Fri, 03/14/2014 - 08:58 | 4547249 Tabarnaque
Tabarnaque's picture

How can gold shoot straight up on that news?! All MSM pundits told us that deflation was the ultimate death for gold!! / sarc

 

Keep stacking bitchez!

Fri, 03/14/2014 - 11:34 | 4548117 midtowng
midtowng's picture

It means the Fed can print all they want

Fri, 03/14/2014 - 09:11 | 4547317 LawsofPhysics
LawsofPhysics's picture

Actually, it is a depression (brought on by the largest theft/fraud in humanity) and it has never abated.  The Fed provided cover for all the private equity folks to finish stealling, now those fucks are out and everyone else will be sacrificed.

Fri, 03/14/2014 - 10:25 | 4547769 moneybots
moneybots's picture

"Its called a "recession" .... when did america get so fucking stupid that it thinks recessions are good things..."

 

Recessions are a good thing.  Expansions create excesses which must be corrected.  Uncorrected expansions that become major booms, result in major busts.

Fri, 03/14/2014 - 08:54 | 4547231 knukles
knukles's picture

Anybody else but me notice the change in the US morning gold ramp?
When JP and Goldie were net short it was slammed right out the 0800 box
Now they're long and it shoots upward a 0800

Fucking coincidences...
They're all over the place

Fri, 03/14/2014 - 09:39 | 4547485 rubiconsolutions
rubiconsolutions's picture

What a bunch of horseshit! I went grocery shopping just yesterday and prices are skyrocketing. Prices for produce are up roughly 30% over last year and beef / pork / poultry are up 50% or so. John Williams at Shadowstats says inflation is running close to 10%. From personal experience I think this may be a little low. To a person there isn't anyone in my sphere who would say that prices aren't going through the roof. And it all makes sense as to why. You simply cannot create money out of thin air and distribute it via a fractional reserve banking system without inflation. To suggest otherwise demonstrates a lack of understanding of basic mathematics.

Fri, 03/14/2014 - 09:48 | 4547534 Tortuga
Tortuga's picture

It's not understanding the maths that the looters have a problem with.

They need to maintain their looting until the wall is finished on their island retreat.

Fri, 03/14/2014 - 13:17 | 4548619 BeerMe
BeerMe's picture

We need to continue repeating that the U.S. is running a Keynesian system.  In theory they want wage controls.  What better way than hidden inflation?  So now we have deficit spending going strong and a continuing mandate of inflation. 

But they better hide the inflation because people understand inflation a little better than in the 30s.

Fri, 03/14/2014 - 08:45 | 4547189 j0nx
j0nx's picture

Tell that to food and fuel. Aint shit dropping in price from my perspective.

Fri, 03/14/2014 - 08:46 | 4547195 Dr. Engali
Dr. Engali's picture

Thank goodness core inflation is down I just ate my last iPad. Lord knows I can't afford real food.

Fri, 03/14/2014 - 08:49 | 4547201 LawsofPhysics
LawsofPhysics's picture

LMFAO!!!

Input cost are down?  Bullshit.  Someone needs to tell the farmers.

Of course the input costs here are pretty much 100% energy.

Feed all those SNAP babies ipads bitchez...

Fri, 03/14/2014 - 08:49 | 4547206 Cannon Fodder
Cannon Fodder's picture

As I mentioned the other day...

Food prices are not down.

Entertainment prices are not down (movie tickets).

College costs are not down.

Healthcare costs are not down.

Home prices are not down.

Ammo prices are not down.

What exactly is it they are measuring that I am supposed to see a reduction in????

Fri, 03/14/2014 - 08:50 | 4547213 LawsofPhysics
LawsofPhysics's picture

edible i-pads.

Fri, 03/14/2014 - 09:02 | 4547272 Tabarnaque
Tabarnaque's picture

I bet you they use a lot of silver in iPads because that baby is on a roll today! These fire sale prices won't last much longer.

Fri, 03/14/2014 - 09:08 | 4547297 LawsofPhysics
LawsofPhysics's picture

You sir, are an optimist.  We are now at the point wherein once the price breaks, the world will go to war in earnest.

Fri, 03/14/2014 - 08:54 | 4547232 Cursive
Cursive's picture

@Cannon Fodder

Hedonics, i.e. economist fiction created to suit their needs.  Prices don't have to go down, the product or service just has to offer more bells and whistles.  How easy is that to manipulate, you think?

Fri, 03/14/2014 - 08:57 | 4547246 Jim B
Jim B's picture

Agreed, gasoline prices seem to be plunging (/Sarc)

Fri, 03/14/2014 - 09:15 | 4547349 DOT
DOT's picture

The addition of ethanol is considered to be an improvement. No inflation, just "improvement".

Fri, 03/14/2014 - 09:18 | 4547366 negative rates
negative rates's picture

Probably your future income.

Fri, 03/14/2014 - 09:21 | 4547384 Navymugsy
Navymugsy's picture

I was out of the country for almost five years and I can't believe:

 

a. Price levels of just about everything.

 

b. Amount of "shrinkflation" that now seems to have run rampant.

 

Other than on someone's balance sheet this deflation is appearing where?

 

 

Fri, 03/14/2014 - 09:45 | 4547512 Tortuga
Tortuga's picture

Deflation is appearing in the minds of bankster and government looters that use the "manipulated" data as cover for additional stealing and manipulation.

Fri, 03/14/2014 - 08:50 | 4547218 Rising Sun
Rising Sun's picture

CRB has been up 8 straight weeks.  This week will be the first down in nine.

 

Deflation is coming, but it's not quite here .... yet

Fri, 03/14/2014 - 08:59 | 4547244 knukles
knukles's picture

Oh yeas oh yeas, deflation us a happening all ovah da place
Ands gonna get worse

Except for food and energy, inspite of über liberal monetary policy.

Come on kids, we know that you know how to say Liquidity Trap
Japanese model!

Fri, 03/14/2014 - 08:55 | 4547238 digitlman
digitlman's picture

If we don't count food and energy then anyting is possible.

 

Fuckers.

Fri, 03/14/2014 - 09:42 | 4547502 yogibear
yogibear's picture

The deflation is just like Obama's cooked-up dramatic increase in the new Obamacare applicants.

The Obama administration has become one big fun house with mirrors everywhere. 

Make the numbers always look better while more jobs are lost and storefronts become vacant.

Warren Buffet playing the game as well.

 

 

Fri, 03/14/2014 - 09:42 | 4547504 Tortuga
Tortuga's picture

I look upon the addition of ethanol as deflation, in the sense that my mpg was reduce @ 20%.

Fri, 03/14/2014 - 09:50 | 4547541 JD Shots
JD Shots's picture

In other words...

Everything you own will be worth less.
Everything you need will cost more.

Fri, 03/14/2014 - 12:42 | 4548456 kenezen
kenezen's picture

Thank You! A prefect Description! Succinct and direct.

Fri, 03/14/2014 - 09:53 | 4547554 Okienomics
Okienomics's picture

Dick from Wells Fargo on Bloomberg just now explaining why weather in the past two months is a good thing for the economy.  Described the huddled masses practically bursting with pent-up demand but unable to go spend spend spend because it's been cold.  I guess this 20-something kid is the last one unaware that if you're bursting with pent-up demand and sitting at home jerking off that you can actually turn off the porn and use your freaking phone, ipad or computer to buy shit from all over the world and have it dropped at your doorstep at prices lower than you could get at da'mall.  Swimming with disposable income, we are, and no where to spend it 'cause it's cold.  Yeah, that's the ticket.

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