The Clap
The producer price index (PPI) declined by 0.5% in December 2022 from the month before, much more than the expected 0.1% decline.
What
The core PPI, which excludes volatile food and energy prices, increased by 0.1% from the previous month, in line with estimates.
On an annual basis, the PPI increased by 6.2% in December 2022, significantly less than the 10% increase during December 2021.
So What
Despite the significant decrease in the PPI compared to the month before, there is no reassurance that inflation will continue to decline, with fuel prices up 21 cents and crude oil prices seeing a 1.6% increase in January.
Now What
The PPI reading suggests slower consumption growth in Q1 2023.
