2 minutes before the PPI number, expected at a 0.0% print, came out, we said:
When PPI comes below expectations does that mean Dimon's plan for quick QE release is on?
— zerohedge (@zerohedge) May 11, 2012 [4]
Sure enough:
- PPI: -0.2%, a decline, and a miss of expectations of 0.0%, Y/Y +1.9%, Exp. 2.1%, first drop in 4 months.
- Core PPI: 0.2%, in line.
- April PPI “should allay fears of producer costs being passed through to customers downstream,” says Bloomberg economist Joseph Brusuelas
- Supports Fed’s assessment of transitory inflation increase on rising oil, commodity costs at end 2011
- Intermediate costs decline points to reduced pressure on profit margins: Brusuelas
- Core intermediate PPI, “closely” watched by Fed, increase "benign," notes Bloomberg economist Rich Yamarone
- Full release for those who care here [5].
[6]
In other words, a perfect environemnt for more easing. So: when does Jamie order the Code Red?
A quick summary from GS:
MAIN POINTS:
- The April Producer Price Index (PPI) declined by 0.2% (month-over-month), in contrast to consensus expectations for an unchanged reading. The weakness reflected a 1.4% drop in energy prices; both gasoline and natural gas prices fell during the month. Food prices rose by 0.2%.
- The core PPI increased by 0.2% (month-over-month), in line with consensus expectations. The core PPI is up 2.7% on a year-over-year basis. Inflation in vehicle prices decelerated during the month, as expected. However, this was offset by slightly higher inflation for medical prescriptions, apparel and computers. Prices for unfinished products showed slower increases or outright declines. The intermediate PPI fell by 0.5%, and the core intermediate PPI increased by 0.2%, down from a gain of 0.6% in March. The crude PPI fell by 4.4%, and the crude core PPI declined 1.8%.