Producer Prices Pop

On Thursday morning, after Wednesday had produced a November CPI report that confirmed at least a two-month reacceleration of consumer level prices (with a third month certainly on the way), the BLS released its data for November producer prices in the form of its PPI report. November PPI was indeed hot, hotter than November CPI had been.

On a month over month basis, headline November PPI printed at growth of 0.4%, up from 0.2% in October, while core PPI actually slowed to growth of 0.2% from October's 0.3% print. The headline month over month print equaled the highest month pace of growth for the series since April. Incredibly, within the report, prices for eggs were up a stunning 54% month over month. That's incredible. Food as a category was up 3.1% for the month.

Now for the year over year data, which is arguably more important. For November, headline PPI was up a very surprising 3%, which was up from October's 2.6% print, which was above September's 2.0% print. That was a super-fast gain of 100 basis points on the index. That should rattle some cages. Corre PPI crossed the tape at a second consecutive month of 3.4% annual growth after hitting a low of 2.6% this past summer. So, some cages were rattled. The US Dollar Index ran higher, taking on and topping the 107 level for the first time in a couple of weeks. The yield for the US Ten Year Note gave up five basis points for the day, rising to 4.33%, as yield for the Two-Year Note gave back four basis points to go out at 4.2%.