US production costs are falling, more than ever since 2020. Are there any other signs of crisis?
Deflation is one step away from inflation, just wait for the first signs of depression to show. Producer prices are the preparation for the drop in retail prices, and therefore for inflation, and for this second phase just wait. U.S. producer prices for final demand fell 0.5% month-on-month in December 2022, following a revised 0.2% increase in November and compared to market expectations of a 0.1% decline %. It was the largest monthly drop since April 2020, adding signs of cooling inflationary pressure in the world's largest economy. Goods prices fell 1.6%, led by a 7.9% plunge in the cost of energy and, to a lesser extent, a 1.2% drop in food prices. On the other hand, prices of services increased by 0.1%, due to the increase in margins for commercial services on final demand. On an unadjusted year-over-year basis, PPI rose 6.2% in December, the lowest since March 2021.
How long does it take to report retail inflation? It will depend on the drop in consumption which will further reduce commercial margins, but will also lead to a reduction in employee compensation and/or layoffs. It's all about time. How many months? Let's bet four.
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The article US production costs fall, as never before since 2020. Other signs of crisis? comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/calano-i-costi-alla-produzione-usa-come-non-mai-dal-2020-altri-segno-di-crisi/ on Wed, 18 Jan 2023 16:31:45 +0000.