Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

More Inflation Pain: Producer Prices Chart Biggest Increase Ever

  by    0   1

The mainstream seemed to take the March CPI data as good news. With core CPI coming in below expectations, the narrative is that we’ve probably hit peak inflation. But the producer price data that came out yesterday tells a different story.

The Producer Price Index (PPI) was up 1.4% month-on-month. On an annual basis, producer prices rose 11.2%. Both numbers were higher than expected and set all-time records.

Stripping out more volatile food and energy prices, the core PPI was up 0.9% from February. That was nearly double the 0.5% projection. It was the biggest monthly gain since January 2021 – when post-pandemic inflation really started to take off.

Year-over-year, core PPI was up 7%.

This does not scream “peak inflation.” In fact, it indicates consumer prices have a lot more potential to rise. As Peter Schiff said in a tweet, “Since YoY consumer prices only rose by 8.5%, businesses are still eating a lot of cost increases that will soon be passed on to their customers. This means future CPI increases will be much greater when they do.”

In other words, the continuing spike in producer prices will likely spill over into CPI down the road, meaning consumers will see more price hikes in the months ahead as businesses pass on at least some of their costs to customers.

Consumer prices typically lag behind producer prices. Looking at the data over the last year, there is a large gap between the prices producers are paying and the prices consumers are paying. Despite the left-wing spin blaming price gouging “greedy corporations” for inflation, companies generally have been slow to raise prices as fast as their costs. That means you’re likely going to be on the hook tomorrow for at least some of the price pressures businesses are feeling today.

Early on in this inflation spike, a lot of businesses appeared reluctant to pass on price increases to their customers because they believed the “transitory” inflation narrative. There was fear that competitors might not match price increases. The strategy was to eat the price hikes for a few months, ride out the transitory inflation storm and then move on. But with the transitory narrative dead and buried, there is nothing to stop businesses from passing their rising costs on to their customers.

In other words, don’t expect any relief from rising prices any time soon.

401k IRA Rollover Free Report

Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

 


Related Posts

G7 Set to Ban Russian Gold Imports

The G7 plans to add gold to its list of sanctions against Russia. This could have an impact on the global gold market. Just how much remains to be seen.

READ MORE →

More Air Hisses Out of the Housing Bubble

As interest rates rise, the air continues to hiss out of the housing bubble. Existing home sales tumbled to a two-year low in May. Sales fell to a seasonally adjusted 5.41 million units, according to the latest data from the National Association of Realtors. It was a 3.4% drop, bringing existing home sales to the […]

READ MORE →

Where Does the Gold Go?

A few years ago, CNBC commentator Jim Leventhal made a pretty astounding comment. When asked about gold, he said he had no interest in it because gold has no uses as a metal. This is a pretty absurd statement. Gold has multiple uses. And it would probably have even more if it wasn’t so rare […]

READ MORE →

Retail Sales Unexpectedly Dropped in May

Retail sales unexpectedly dropped in May, casting doubt on Federal Reserve Chairman Jerome Powell’s “the American consumer is healthy” narrative.

READ MORE →

Producer Prices Continue to Rise at Near-Record Pace

Producer prices continue to rise at a near-record pace, further undercutting the notion that we’ve reached “peak inflation.”

READ MORE →

Comments are closed.

Call Now