U.S. Producer Price Index Rose 0.4% In October
(For October 2010)
U.S. producer price index rose 0.4% in October vs. 0.8% consensus. September reading was also at 0.4%. On year level PPI is up 4.3%.
Chart 1. U.S. Producer Price Index
Food & energy taken out U.S. producer price index fell 0.6% in October. The consensus and prior reading were at 0.1%. On year level core PPI is up 1.4%.
Chart 2. U.S. Producer Price Index – Core
This is quite negative for company margins: rising commodity prices increase expenses (as depicted by rising PPI) while weak demand erodes pricing power(as depicted by falling core PPI). If it continues this could be the first unintended consequence of QE that adversely effects the economy.