US Inflation, PPI, CPI, Federal Reserve – Talking Points
- U.S PPI (YoY) (JAN) Actual: 9.7% VS 9.7% Previous; est. 9.1%
- U.S CORE PPI (MoM) (JAN) Actual: 0.8% VS 0.5% Previous; est. 0.5%
US Producer Price Index (PPI) data came in above expectations for January, as price pressures continue to increase broadly. Headline PPI for January rose 9.7%, surpassing the consensus estimate of 9.1%. On a month-over-month basis, PPI increased by 1.0%, doubling the forecast of 0.5%.
US Producer Price Index Breakdown
Courtesy of the BLS
The increases in producer prices comes off the back of last week’s hot CPI print, which showed consumer prices rising at the fastest pace in 40 years. Supply bottlenecks continue to plague the global economy, as governments and central bankers reiterate that supply pressures should begin to ease over the course of 2022. Despite Omicron cases falling in the US, they continue to surge in Asia, a large source of raw materials for US factories.
US Dollar Index 1 Hour Chart
Chart created by TradingView
Markets were relatively calm in the aftermath of the PPI release, with the major move coming earlier on the news that Russian troops would return to their permanent bases following war exercises in Belarus. A buoyant Euro saw the US Dollar Index trade back to test the key 96 level, while S&P 500 futures pulled back from pre-market highs ahead of the US open. It may take time for the Russia-Ukraine headlines to wash out before markets can digest the newest round of US PPI figures.
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--- Written by Brendan Fagan, Intern
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