by Karl Denninger
Market-Ticker.org
Let’s do the forward look first, since that’s what really ought to matter — PPI.
The index for final demand less foods, energy, and trade services moved up 0.4 percent in April after rising 0.2 percent in March. For the 12 months ended in April, prices for final demand less foods, energy, and trade services increased 3.1 percent, the largest advance since climbing 3.4 percent for the 12 months ended April 2023.
So much for the forward looking indices relaxing. Uh, nope. And what is especially troublesome is that both goods and services moved in unison.
Remember we are a majority-services economy. People often disregard goods inflation in the pipeline with some level of justification because its simply a smaller piece of the basket and is subject to quite a bit of discounting as you go through the stages of production. Neither is true for services.