US producer prices, An explosion that does not bode well
Today came an update on US producer prices, the level of which is all-time high, as indicated by the FED database, FRED:
If we analyze the variations and compare them with those of the last five years, we see how the peak of the last month is yet another after a series of significant increases following the first phase of covid-19.
Let's move on to analyze the causes and consequences. Yesterday we said that European inflation is very different from that of the United States. The production cost analysis further confirms this impression. In fact, the increases have been
- Ex-food and energy + 7.7% YoY vs + 7.2% exp and + 6.8% previously
- Ex-food, energy and semi-finished goods + 6.9% on an annual basis compared to + 6.3% previously
Both the prices of goods and services have risen with energy and transport costs the main drivers.
Within the final demand for goods in November, iron and steel scrap prices increased by 10.7%. The indices for gasoline, fresh fruit and melons, fresh and dried vegetables, industrial chemicals and jet fuel also increased. Conversely, diesel prices fell by 2.6%. The indices of processed poultry meat and light commercial vehicles also fell.
Furthermore, the prices of semi-finished products have a higher growth than that of finished products. This means that the prices of finished products will increase further before they can decrease.
So we see that the weight of energy is secondary in the rise in US producer prices compared to what happens in Europe. This means that costs increase because there is actually a greater internal demand, not due to an energy crisis caused by the intersection of wrong energy policies and the desire to confront, politically, with our suppliers. Europe and the USA have taken two different paths from an economic point of view: the first is that of forced repression, the second that of growth, perhaps even excessive. Curiously, very few have noticed. However, this price increase will have been passed on to consumer prices.
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The article US producer prices, An explosion that does not bode well comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/prezzi-alla-produzione-usa-unesplosione-che-non-lascia-presagire-nulla-di-buono/ on Tue, 14 Dec 2021 14:42:54 +0000.