Producer Price Index (PPI)
October's Producer Price Index (PPI) that was released at 8:30 AM ET this morning gave us some insight into inflationary pressures at the wholesale level of the economy. The data provided mixed feedback on the subject with the overall PPI reading coming in at up 0.3% when it was expected to be up 0.4%. On the other hand, the core data that excludes more volatile food and energy costs pegged forecasts of a 0.3% rise last month. We are labeling the report neutral for mortgage because even though the overall reading was a tad below expectations, core data showed no surprises and the year-over-year numbers of up 6.5% and 5.0% respectively are still significantly higher than the Fed’s goal rate and don’t appear to be coming down. Yes, these are wholesale inflation numbers and not consumer prices, but wholesale price increases usually trickle down to the consumer level eventually.