US PPI data for January 2021
- Final demand MoM 1.3% vs. 0.4% estimate
- Ex Food and energy 1.2% vs. 0.2% estimate
- Ex food and energy, trade 1.2% vs. 0.2% estimate
- Final demand YoY 1.7% vs. 0.9% estimate
- Ex food and energy YoY 2.0% vs. 1.1% estimate
- ex food, energy, trade YoY 2.0% vs. 1.0% estimate
- Goods rose by 1.4% with energy up 5.1% in January
- Services rose by 1.3% with trade up 1.0% and transportation/warehousing up 1.3%
Below is a chart of the final demand PPI. The level is the highest since January 2020 when it moved up to 2.0%.
Producer price inflation numbers much higher than expected which will get the market thinking that the wholesale inflation would push into the consumer price data. US stocks are lower with the NASDAQ down around -67 points (as implied by the futures). The Dow industrial average has also moved lower after trading higher. Yields have also moved back toward unchanged level in the longer end on the initial move higher.
The market may be concerned about the future inflation, but the Fed has said that they will let inflation run hot and consider the expected rises to be transitory rather than permanent in nature.
