US Producer Prices Explode To Record High In November (And There's Worse To Come)

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by Tyler Durden
Tuesday, Dec 14, 2021 - 01:38 PM

After CPI's rise last week (which was somehow briefly seen as 'good' news because it was lower than a wild whisper number), Producer Prices tore up the narrative this morning printing a record breaking 9.6% YoY rise (smashing expectations of +9.2% and well above the +8.6% YoY print for October)....

Source: Bloomberg

Worse still, core PPI surged:

  • Ex-food and energy +7.7% YoY vs +7.2% exp and +6.8% prior

  • Ex-food, energy, and trade +6.9% YoY vs +6.3% prior

Both Goods and Services prices rose with Energy and Transportation costs the biggest drivers.

Within final demand goods in November, prices for iron and steel scrap rose 10.7 percent. The indexes for gasoline, fresh fruits and melons, fresh and dry vegetables, industrial chemicals, and jet fuel also moved higher. Conversely, prices for diesel fuel decreased 2.6 percent. The indexes for processed young chickens and for light motor trucks also fell. 

Leading the November increase in the index for final demand services, prices for portfolio management advanced 2.9 percent. The indexes for guestroom rental; securities brokerage, dealing, investment advice, and related services; fuels and lubricants retailing; airline passenger services; and transportation of freight and mail also moved higher. In contrast, margins for chemicals and allied products wholesaling fell 1.3 percent. The indexes for furnishings wholesaling and for bundled wired telecommunications access services also declined.

And judging by the exploding pipeline for producer prices, things are going to get a lot worse before they get better...

That is the highest PPI Intermediate since Dec 1974... and the US had mile-long lines for gas...