Core PPI Comes Hotter Than Expected, Driven By Rising "Brokerage, Investment Advice" Prices

Tyler Durden's picture

While headline PPI came in at 0.3% on a sequential basis, as expected, and rose 1.6% on the year, also in line with expectations, it was the core PPI that came in modestly hotter than expected, printing at 0.2%, above the expected 0.1%, and rose 1.6% Y/Y, above the 1.5% expected, and far above the -1.1% drop reported one year ago.The headline jump was driven by a spike in energy prices, as final demand energy rose 2.6% in December. Accounting for almost half of the December jump in final demand goods prices, the index for gasoline climbed 7.8% , while heating oil was up 9.6%.

Away from the non-core energy and gasoline prices, the headline PPI rise was driven, surprisingly, mostly by "prices for securities brokerage, dealing, investment advice, and related services" which advanced 4.4%. In other words, brokers are capitalizing on the rush by retail investors to jump in the market and are hiking prices.

Nonetheless, on an annual basis, the 1.6% increase in PPI was the highest since August 2014.


Broken down between goods and service:

The breakdown:

The breakdown between goods and services:

Final demand goods: Prices for final demand goods jumped 0.7 percent in December, the largest increase since a 0.7-percent rise in June. Sixty percent of the December broad-based advance can be traced to the index for final demand energy, which climbed 2.6 percent. Prices for final demand goods less foods and energy rose 0.3 percent, and the final demand foods index increased 0.7 percent.

Accounting for almost half of the December jump in final demand goods prices, the index for gasoline climbed 7.8 percent. Prices for light motor trucks, jet fuel, iron and steel scrap, chicken eggs, and liquefied petroleum gas also increased. In contrast, the index for fresh fruits and melons fell 13.6 percent. Prices for residential electric power and for plastic resins and materials also decreased.

* * *

Final demand services: The index for final demand services inched up 0.1 percent in December after increasing 0.5 percent in November. About 70 percent of the December advance can be attributed to prices for final demand services less trade, transportation, and warehousing, which rose 0.2 percent. The index for final demand trade services also advanced 0.2 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Conversely, prices for final demand transportation and warehousing services declined 0.4 percent.

Most of the December increase in the index for final demand services can be traced to prices for securities brokerage, dealing, investment advice, and related services, which advanced 4.4 percent. The indexes for machinery, equipment, parts, and supplies wholesaling; apparel, footwear, and accessories retailing; food retailing; and health, beauty, and optical goods retailing also moved higher. In contrast, prices for airline passenger services fell 2.4 percent. The indexes for fuels and lubricants retailing, loan services (partial), and apparel wholesaling also decreased.

* * *

In short, in December, the price of gasoline and heating surged, brokerage fees jumped, and everything else was largely in line as airplane tickets dropped while the price of fruits and melons tumbled.

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Bill of Rights's picture

Pricks are doing everything in their power to flush Gold and Miners on the futures, based on SHITTY DATA...amazing to watch, and the bull shit continues.

BandGap's picture

I am taking the opportunity to accumulate. Just like PMs, miners will be on the move up once the true assessment of value returns.


Whoa Dammit's picture

Looks like advisors are raking it in by telling their clients to BTFD and trade against Gartman. LOL.

LawsofPhysics's picture

which may happen after WWIII.


same as it ever was.

ejmoosa's picture

Nugt 1 year ago: $3.48

Today: $9.55

Up 282%

I think they are failing and will continue to fail.

BandGap's picture

EXK - year ago 1.10, now 4.00


But I am not cashing out until the fat lady sings.

venturen's picture

imagine the price increase  of nail guns in the next go around

scoutshonor's picture

Decent melons have been over priced for quite some time--good to see those more within reach.

King Tut's picture
King Tut (not verified) scoutshonor Jan 13, 2017 9:27 AM

Broads with decent melons are always going to be overpriced

CRM114's picture

Higher priced.

They aren't overpriced if they are worth it!

FreeShitter's picture

Backpage hookers even went up 20.00 an hr

allamerican's picture

head line joke of the day- advance due to "brokerage advice". fish heads be slobering all over themselves.  

LawsofPhysics's picture

Just like the 1930s, the Fed has transfered as much wealth as they can to their owners.  They will now lose control (first by deflation then hyperinflation). They must defend the only thing that they really control, specifically, the Federal Reserve Promissory Note.

Global Weimar is inevitable now.

DingleBarryObummer's picture

So the deflation will start to occur when the stock market bubble bursts/collapses, am I correct?

LawsofPhysics's picture

I believe that we have already gone through the deflationary period.  The very credibility of central banking and governments is now in question. I am a 3rd generation farmer and I am very familiar with razor-thin margins of running a business that has real (physical) input costs in order to deliver a real (physical) product.

Inflation has been on a tear for some time now.

Wake the fuck up.

DingleBarryObummer's picture

Trying to.  Many hypnotists and bullshit artists out there trying to lull me back to sleep.

Serfs Up's picture

Yes...moar inflation leads to...let me check my secret Janetyellendog decoder ring...higher stawks and lower gold.

Yep - FU and all your bankster fiends.  The day will come... oh yes it will.


jamesmmu's picture

So wallst wants inflation, thats only thing they care for?




and they dun care what kind of inflation.

wizteknet's picture

Update 10:15pm

Total bloodbath in markets - Peso has crashed to record lows above 20/$ and Dow Futures are down over 650 points...

Baby Eating Dingo22's picture

I prefer fruit fresh and sweet and melons young and perky

highwaytoserfdom's picture


Forcing Japan and Government Court and legal MIC cabal   coming get retirement... 

jamesmmu's picture

this is not going to be a flat day, either 20k or correction. They havent place their bets yet. Volumn so low.

jamesmmu's picture
Amazon’s Promise of Creating 100,000 Jobs Is Good but Rising Cost of Labour Will Hurt

Youri Carma's picture

Sounds like a joke: "The headline PPI rise was driven mostly by "prices for securities brokerage, dealing, investment advice, and related services" which advanced 4.4%."

Grandad Grumps's picture

Wit, what? A Broker is a producer? You have to be kidding me.