Producer Price Inflation Prints Much Hotter Than Expected As Energy Costs Soar

After a mixed bag from CPI yesterday (headline better, core weaker) with apparel prices plunging, expectations for producer prices were more of the same slowflation.

However, much to the chagrin of Fed doves everywhere, PPI came in much hotter than expected (+2.2% YoY vs +1.9% YoY expected) thanks to a 0.6% surge MoM (doubling the 0.3% expected rise)...

Goods rose 1.0% MoM and Services were up 0.3% MoM but the biggest driver of this 'surprise' is a 5.6% MoM spike in Energy costs...the biggest jump on record...

Of course, there is something for the doves to cheer as core-core PPI (Final Demand ex Food, Energy, & Trade Services) slowed to just 2,0% YoY...

This is the weakest since Aug 2017.

So apart from soaring fuel costs (PPI) and shelter costs (CPI), there's no inflation and The Fed can sit on its hands for another 9 months?