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Producer Prices Rise Again Driven By Surge In Energy Costs
If low oil pries are great for America "unequivocally," then the continued surge in Energy costs (+2.4% MoM in June) must be [fill in the blank]? PPI Final Demand rose 0.4% MoM - near the fatest pace in 3 years (beating expectations of a 0.2% rise) but fell 0.7% YoY. The huge gap between core and headline PPI continues to grow with PPI Ex Food and Energy rising 0.8% YoY, its first acceleration in 2015.
PPI Final Demand rises MoM once again at near the fastest pace in 3 years
PPI Ex Food and Energy saw its YoY rise from the previous month for the first time this year...
The breakdown is as follows...
Final demand goods: The index for final demand goods moved up 0.7 percent in June after rising 1.3 percent a month earlier. Almost 60 percent of the broad-based advance in June is attributable to prices for final demand energy, which climbed 2.4 percent. The indexes for final demand goods less foods and energy and for final demand foods increased 0.4 percent and 0.6 percent, respectively.
Product detail: Thirty percent of the June advance in prices for final demand goods can be traced to the gasoline index, which rose 4.3 percent. Prices for chicken eggs, pharmaceutical preparations, residential electric power, residential natural gas, and cigarettes also moved higher. In contrast, the index for fresh and dry vegetables fell 6.0 percent. Prices for liquefied petroleum gas and electronic computers also decreased.
Final demand services: The index for final demand services moved up 0.3 percent in June following no change in May. Over half of the broad-based advance can be traced to a 0.2-percent increase in the index for final demand services less trade, transportation, and warehousing. Margins for final demand trade services rose 0.2 percent, and the index for final demand transportation and warehousing services advanced 0.6 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.)
Product detail: Thirty percent of the June increase in the index for final demand services can be attributed to prices for loan services (partial), which climbed 2.4 percent. The indexes for machinery and equipment wholesaling, fuels and lubricants retailing, truck transportation of freight, deposit services (partial), and portfolio management also moved higher. Conversely, margins for food and alcohol wholesaling declined 3.7 percent. The indexes for traveler accommodation services and passenger car rental also declined
Charts: Bloomberg
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The lies just will not end! PPI Final Demand rose 0.4% MoM - near the fatest pace in 3 years (beating expectations of a 0.2% rise) but fell 0.7% YoY. X3 and you may be close!
keynsian wetdream = stagflation. kill 2 birds (bird 1. inflate prices making people dependent on you bird 2. shitty economy/private sector job growth making people dependent on you) with 1 stone (endless $$$ printing making people dependent on you because if you stop, you cause a techincal "recession" - since you stopped pulling the future gains forward - and the people look to the government to "do something" which all the know is more stone throwing, um, $$$ printing)
This is like the economy is Kenya, funny how theuy now mirror each other!
Moral hazard and the laws of Nature and physics are a real motherfucker. They will re-assert themselves, slowly at first, then all a once.
In this case, pushing fucking paper/digits is fucking irrelevant to the real economy. The real economy must have consumable calories to spend or nothing gets done, period.
I occassionally like to look at this chart and think about just what a complete disaster this has been and will continue to be.
https://research.stlouisfed.org/fred2/series/BASE
I don't know that there is a good common understanding that this was flat out currency devaluation, even amongst the ZH member base. It has been generally understood that the underpinning of the value of the USD was the GDP. The growth in this reserve number was in lockstep with GDP growth until 2008. Anyone else see a 450% increase in GDP since 2008? Me neither. Now consider this through the lens of the S&P 500. Did that increase 450% since 2008? Or has it functionally continued to crash vs. the increase in USD supply? It's all just this naked fucking mirage (acknowledging the oxymoronical nature of this phrase) that is nonetheless a very powerful.
I know you're well aware of this Laws, but it concerns me that, again, even a good chunk of what should be awake people here are not really aware of this. We are fucked in such a fundamental way, ergo your appeal for people to consider things on a more fundamental level.
And here I was thinking that prices were going up due to the surge in executive suite costs.
They are going to go full retard creative until we can get back to a month that has snowfall.
dees guys is Jonesing for a snowflake.
It's because the long-awaited recovery in the economy is finally starting to happen.
-MDB
From my perspective, on the ground.
Housing sucks. Houses are being built, but not at historical levels. It is excruciating in time and money to get permits. And almost ALL the labor is Hispanic. Legal or illeagal. Who cares? The native born entering the construction trade has been decimated. At all levels, from roads and infrastructure, to new homes, to major office and high rise construction.
Multi - family is still hot.
Construction is a huge industry. It is, arguably, the only major value added industry that cannot be offshored. Although, when you buy whole bridges in China, and ship them here in pieces to be assembled by recent immigrant labor, they are trying hard.
Every kid born in the US is not destined to be an engineer. Some ( most) need to work with their hands. There is not enough of this to go around.
There are TOO MANY people born here, not employed. How do they eat?? We know how. And that cannot last forever.
I've met kids that can text so fast it makes your head spin. Hook up a video game like they where born with the knowledge. But can't make change without a register calculating it for them!
I personally, haven't bought a damn "new" thing in 3 years. No vehicle, tools, furniture, etc.
We did buy a mower. And I repair everything. As inexpensivley as possible. No demand in this household.
They, TPTB, are leaving the borders open , flooding the country with people who don't have anything but a willingness to work, to create demand and for the labor. They know everyone born here has a new car, 4 plasma tvs,latest I- gadgets, a college loan, clothes out the wazoo, tatoos and season tickets to whatever team is in their area.
And boomers are retiring at 10,000 a day. And the jobs that leave, are being phased out. That would have been phased out ten years ago, but boomers are to powerful a force. If you know anyone in Fed.gov, who is honest, they will tell you the systems in place are antique, and the entrenched boomers keep it that way. Without antique systems, they are redundant. I am a boomer, by the way. Who can fix and build things. My talents are in high demand, but the pay scale has been crushed by the immigrants. They don't know what they are doing, but put three on the job at the same price, with modest oversight, and I can't compete.
And oh, by the way....if you live in a new house...less than 10 years old...hahaha! Sure, it passed inspection!
Rant off.
Where are you located. Here in the greater Boston area all the labor is white. Hispanics are very rare in any construction trade and unskilled labor non union starts at $25 per hour.
Maryland.
And it shocking when a white guy shows up, unless it is licencesd trades. But even those are going " south" .
And, quite frankly, I find your statement a little hard to believe.
How are you involved in construction?
Edit. On second thought, bullshit.
In Arizona,
You guys still have white people? I'm one of those people who wasn't destined to be an engineer. Right now I'm working part time (by choice) on NG conversion prototypes, we had consultant engineer and then we fired him. Things are going much smoother now.
In Texas, no need to apply for a construction job if you don't speak Spanish. The great advantage of little or no education is that you fail to understand any concept of supply and demand. I have tried to explain to Hispanics that every time their cousin or brother comes across the border it limits THEIR ability to advance. Open borders are the giant sucking sound we hear as it is a vacuum, a void of unemployment that will prevent any stabilization of our job markets. Like a small hole in the skin of an aircraft, the pressure differential will just keep tearing until equilibrium is achieved and the remains are on the ground.
All compassionate people can understand that equalization will need to eventually occur, but to do so without regulation or control is massively destructive. It is those who see themselves immune and above it all who are the most egalitarian with yours and mine lives. They do not fear the loss of their jobs or reduction of their income by this humanitarian equalization.
As with all other progressive themes, sacrifice is called for, but not by those who do the sacrificing. And they recognize that those who see themselves as capitalists will always respond, attempting to make lemonaide from lemons, to ensure the agenda is perpetuated.
As a small businessman in Texas I have seen it and felt it. Owning a small furniture and cabinetry business for thirty years does give some perspective that does not come from "on high". Competitive pressures from imports or product as well as labor have forced us to either capitulate to proggressivism or adopt technology.
It is not so much what is happening as it is the speed of what is happening that is most destructive...to lives but also to social order and civilization. This is driving people apart at the same moment we are supposed to be celebrating "multiculturalism". This is a critical mass that is building and we cannot know how large the resultant explosion will be but it will not be "progress".
Zimbabwe economics is going to be a bitch.