The BLS report the Producer Price Index was rose 0.2 percent in October but the details are unsettling.

PPI Final Demand Key Detail Month-Over-Month

• PPI: +0.2 Percent
• Services: +0.3 Percent
• Goods: +0.1 Percent
• Excluding Food and Energy: +0.3 Percent
• Food: -0.2 Percent
• Energy: -0.3 Percent

Despite declines in food and energy, the PPI was up 0.2 percent.

Goods Details

• An 8.4-percent increase in the index for carbon steel scrap was a major factor in the advance in prices for final demand goods.
• The indexes for meats, diesel fuel, fresh and dry vegetables, and oilseeds also moved higher.
• Prices for liquefied petroleum gas fell 18.1 percent.
• The indexes for chicken eggs, processed poultry, and ethanol also decreased.

Services Details

• Over three-fourths of the broad-based advance in October is attributable to prices for final demand services less trade, transportation, and warehousing, which moved up 0.3 percent.
• The indexes for final demand transportation and warehousing services and for final demand trade services also increased, 0.5 percent and 0.1 percent, respectively.
• Over one-third of the rise in the index for final demand services can be traced to prices for portfolio management, which advanced 3.6 percent.
• The indexes for machinery and vehicle wholesaling; airline passenger services; computer hardware, software, and supplies retailing; outpatient care (partial); and cable and satellite subscriber services also moved higher.
• Margins for apparel, footwear, and accessories retailing fell 3.7 percent.
• Prices for securities brokerage, dealing, investment advice, and related services and for truck transportation of freight also declined.

PPI Year-Over-Year

PPI Final Demand Year-Over-Year Details

• PPI: +2.4 Percent
• Goods: +0.2 Percent
• Services: +3.5 Percent
• Food: 2.7 Percent
• Excluding Food and Energy: 3.1 Percent
• Energy: -8.6

The year-over-year trends are inching up despite a massive drop in energy.

PPI Services

PPI Services are 67.2 percent of the PPI.

Trade, Transportation, and Warehousing are are 24.1percent of the PPI.

CPI Rises 0.2 Percent But Another Hot Month for Shelter

Yesterday, I reported CPI Rises 0.2 Percent But Another Hot Month for Shelter

The Fed will have a tough go of things if there is lack of progress on the cost of shelter.

Neither the CPI nor the PPI reports should inspire confidence in a mass of rate cuts by the Fed.

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