Consumer prices for September will be released tomorrow. This morning the upstream producer prices were released. Total PPI rose by 0.4%, after two straight months of decline; but excluding those and December 2021, the lowest monthly increase since November 2020. Here are the monthly changes compared with CPI:

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YoY producer prices increased at the lowest rate in a little over a year:

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Core PPI increased by 0.2% (blue in the graph below), which was the lowest reading since December 2020, and in line with historical pre-pandemic readings, in contrast to the continued elevation in core CPI (gold):

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PPI’s primary housing component is residential construction materials. Here are the absolute values in both flavors of that reading, normed to 100 as of January of this year:

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Note that both have declined in the last few months, with construction materials down -2.6% since January, and goods inputs essentially flat since March. Both are still very elevated, up over 33% since the end of 2020. But at least they are o longer rising.

With a slower economy, as expected producer prices are easing. Tomorrow we will find out just how much Owners’ Equivalent Rent is distorting consumer prices to the upside.

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