Tuesday, November 16, 2004
PPI index reported this morning had the biggest gain in nearly 15 years. When producers pay more for raw materials, they usually pass those price increases to the consumers which leads to inflation. Core PPI which exlcludes food and energy was also stronger than expected. So its not just oil that is causing the PPI gains. The weakening dollar certainly does not help this situation and if the economy is really picking up steam and employment picture improves the inflation hawks will be out in force.