Drudge Retort: The Other Side of the News
Wednesday, May 15, 2024

It's a game of numbers no one seems to be winning. The brand new Producer Price Index, which shows how much manufacturers pay their suppliers, just hit its highest rate in a year, according to the Bureau of Labor Statistics. "What this indicates is a lot of the progress that we've seen in slowing inflation - that stalled in early 2024," said Gus Faucher, Chief Economist with PNC Financial Services Group, in an interview with The National Desk Tuesday. Known as "wholesale inflation," the April rate rose 2.2%, with costs expected to be passed on to consumers in the months ahead, following three months of less-than-ideal numbers. Speaking at the annual Foreign Bankers Association meeting in Amsterdam Tuesday, Federal Reserve Chairman Jerome Powell signaled the waiting game for interest rates to be cut will likely go on even longer.



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The fed just announced there is no greed? If the banks say life is good it must be?/s

#1 | Posted by Brennnn at 2024-05-15 03:09 PM | Reply

Another Sir Gracie fascistic fan fiction piece.

#2 | Posted by a_monson at 2024-05-16 06:00 AM | Reply

I thought we weren't supposed to trust government inflation numbers?!?!

#3 | Posted by jpw at 2024-05-16 09:42 AM | Reply

Wholesale prices can go up all they want but consumers will pay what they will pay. Prices will come down when people run out of money and stop buying. That impacts the pricing.

Wholesaler prices don't scare me....they are a prediction of what they believe consumers can afford and are betting retailers can pass along the increase.

They are either right or not.

You expect wholesalers to increase prices as far as they possibly can until they can't do it any longer.

#4 | Posted by eberly at 2024-05-16 10:32 AM | Reply

In the automotive industry they're always right. They update monthly. It's wholesale + 30% unless it's matrix pricing which causes small variations but significant changes are outliers.

#5 | Posted by sitzkrieg at 2024-05-16 10:42 AM | Reply

~ Prices will come down when people run out of money and stop buying

This is how it works

#6 | Posted by lfthndthrds at 2024-05-17 01:28 PM | Reply

#4 | Posted by eberly at 2024-05-16 10:32 AM
Wholesaler prices don't scare me....

They should - the markets just had a party based on supposed "slowing consumer inflation" numbers, which were predictable from last month's PPI numbers (-0.1%). We just had huge increases in PPIs for April, predicting the increase in consumer inflation in next few months.

In January 2024 the markets expected 6-7 Fed rate cuts, just last week the Fed's Powell said rates "won't increase"(!) this year - drastic change in tone, and probably a 'politically reasonable' move with the election coming soon, not to tank Biden's chances.

Both Trump and Biden and the Congresses have poured $Trillions into an economy, states mandated increases in "minimum wages" and benefits for unskilled (which are passed to consumers, along with RIFs, reduction in hours, outsourcing and automation) and stupid tariffs, to "protect" for consequent uncompetitive cost structure, i.e., "pricing ourselves out of the market."

We had threads here about "populist" isolationist Trump not understanding the economics of tariffs and trade, and loss of hundreds of thousands jobs... Of course, "Trump's tariffs bad, Biden tariffs good ('targeted')" will get us eventually to the same place - higher inflation and loss of some foreign markets as countries respond in kind. - Biden kept Trump's tariffs on Chinese imports. This is who pays the price. - Biden's China tariff threats are more bark than bite

Despite what some "experts" say, numbers show that economy is not in great shape:

Actual -- Expected -- Prior
0.5% -- 0.3% -- -0.1%
Core PPI Apr
0.5% -- 0.2% -- -0.1%

0.3% -- 0.4% -- 0.4%
Core CPI Apr
0.3% -- 0.3% -- 0.4%

Productivity - Q1
0.3% -- 0.8% -- 3.5%

Unit Labor Costs - Q1
4.7% -- 2.5% -- 0.0%

Avg. Hourly Earnings - April
0.2% -- 0.3% -- 0.3%

Average Workweek - April
34.3 -- 34.4 -- 34.4

Retail Sales Apr
0.0% -- 0.4% -- 0.6%
Retail Sales ex-auto Apr
0.2% -- 0.2% -- 0.9%

Import Prices Apr
0.9% -- NA -- 0.6%
Import Prices ex-oil Apr
0.7% -- NA -- 0.2%

Export Prices Apr
0.5% -- NA -- 0.1%

NY Fed Empire State Manufacturing May
-15.6 -- -9.0 -- -14.3

Philadelphia Fed Index May
4.5 -- 5.0 -- 15.5

UofMichigan Consumer Sentiment May
67.4 -- 76.5 -- 77.2

... prediction of what they believe consumers can afford and are betting retailers can pass along the increase.

They are not "betting" - the price they paid (plus usual profit margins) is passed to consumers, which will be reflected in CPI 1-3 months from now.

You expect wholesalers to increase prices as far as they possibly can ...

No different than before inflation spike - the increases are all along supply chains, as their expenses increase. Government and consumers have been spending like there is no tomorrow, household CC and BNPL debt is staggering, people are dipping into retirement accounts. Few companies do make "record profits" (at least, unadjusted for inflation) but a lot more, especially lower-end-consumer-facing, like discounters and restaurants are struggling to break even or even fold, especially those having large debt or needing more credit.

We have a like-'70s "Tower of Pisa" economy ("stagflation" / "growflation") and like-Y2K stock market bubble (this one based on "AI" and Magnificent Seven instead of "internet").

At least Biden stopped saying "Bidenomics" and "shrinkflation."

#7 | Posted by CutiePie at 2024-05-18 02:50 AM | Reply | Newsworthy 1

" #7 | POSTED BY CUTIEPIE AT 2024-05-18 02:50 AM | FLAG: "

I've ridiculed you for the length of your posts along with the eyesore nature of how you compose them. I decided to wade through this most recent post and while my past criticisms stand, I found your post to be well sourced and your editorializing of the information you were presenting to be well thought and balanced.

I really liked that post and I apologize for levying superficial criticism.

#8 | Posted by BellRinger at 2024-05-18 03:05 AM | Reply

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