INFLATION FOR GOODS AND SERVICES CONTINUES TO TELL TWO DIFFERENT STORIES

We continue to receive confirmations of our thesis that inflation is in services and hidden in goods via statistical trickery such as substitution, hedonics and imputation.  We laid this out in our recent video: The Supply Demand Services Problem.
The just released Producer Price Index was the weakest headline PPI print since Jan 2017. Core Producer Price inflation has slowed for six straight months to +2.3% YoY but the headline (NSA) data slowed to just 1.8% YoY (notably below the +2.0% expectation). This headline print below the 2.0% Maginot Line, surely gives The Fed more ammo for its pre-crime "insurance cut"?

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Final Demand Goods prices shrank 0.2% in May, HOWEVER Services prices rose 0.3%...

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Though margins for apparel, footwear, and accessories retailing declined 5.2 percent and the indexes for machinery, equipment, parts,  supplies wholesaling decreased (All IMPORTED GOODS),  the indexes for fuels and lubricants retailing, outpatient care (partial), inpatient care, portfolio management, and transportation of passengers (partial) moved higher (DOMESTIC SERVICES). the PPI (ex Food, Energy, and Trade Services) rose to +2.3% YoY.

Services such as guestroom rental, jumped 10.1 percent. This is a record surge in guestroom rental prices on a non-seasonally-adjusted basis...

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HERE IS WHERE CONSUMER INFLATION IS AND IS NOT EFFECTIVELY REPORTED

 

 

[SITE INDEX -- MATA: DRIVERS - INFLATION]

READERS  REFERENCE (SUBSCRIBERS-RESEARCH & PUBLIC ACCESS ) 

MATA: DRIVERS - INFLATION

MATASII RESEARCH ANALYSIS & SYNTHESIS WAS ABSTRACTED FROM:

SOURCE:  06-11-19 -  - "Producer Price Growth Slumps To Weakest Since Jan 2017"

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