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What the PPI is Telling Us: Disinflation in “Core Goods,” a Hefty Counterweight to Hot Services Inflation, May Be Over

March 15, 2024

And that’s very disconcerting.

The Producer Price Index (PPI) for final demand jumped by 6.9% annualized in February from January, on top of the 3.9% jump in the prior month. The three-month rate jumped to 3.3% annualized, the highest since September.

Part of this was driven by a renewed surge in energy cost. But the other part was driven not only by surging costs in services – we knew that – but now also by surging costs in core goods, and that’s very disconcerting.

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