Wall Street and the financial media are globalists, staunch protagonists for free trade and a rules based order (rules for thee but not for me). Trump is dismantling the globalist system and replacing it with the Hamiltonian American system--public-private partnership to provide capital for manufacturers, producers and entrepreneurs, tariffs to protect those domestic creators of wealth, and bi-lateral partnerships with sovereign nations that benefit the working and middle classes of both countries.
I think this is why most of the old, reliable economic indicators and models have been more worthless than normal. The old paradigm is dead and the new paradigm is being created before our eyes. As the media (financial, mainstream and social) pore over the Epstein files for salacious sexual scandals of financiers, billionaires, politicians and celebrities, they are missing the revelations in the files of the 2008 financial crisis and how the elite protected themselves at the expense of the taxpayer. As always, the ladies at Promethean Action have the goods: https://www.youtube.com/watch?v=mHER7T8g1Fs
Are wage increases a part of the Producer Price? I know I saw a lot of headlines with “new hourly wage increases begin January 1” although this data is prior, but wages have been increasing, and unionization is also dramatically increasing which I would think impacts Producers and Transport etc
The Producer Price Index is an indexed aggregate measure of the prices suppliers charge for goods and services. This contrasts with the Consumer Price Index, which is an indexed aggregate measure of the prices consumers pay for goods and services.
The distinction is mostly one of timing, hence producer price inflation is also known as factory gate inflation—inflation when the product leaves the factory gate, so to speak. This distinction is also why, historically, the Producer Price Index has been viewed as a leading indicator for the Consumer Price Index; a price shift up or down in the PPI heralds a similar shift in the same direction a few months later in the CPI.
As a price Index, the PPI does not measure costs directly, including wages. That being said, increasing wages are obviously an inflationary price pressure and would be another of the myriad inflationary and deflationary forces which resolve to produce actual inflation.
I suspect what we are seeing in the PPI is the introduction of new price pressures post-COVID which are becoming apparent in the aftermath of the 2022 hyperinflation cycle.
Exactly what those price pressures might be I have not yet worked out, but several price relationships are breaking down in recent years.
The fundamental drivers of prices and inflation have not changed, but it is becoming increasingly clear the economic environment is changing. Trade relationships are becoming frayed. Supply chains are being revealed as more brittle and more fragile than previously believed. Geopolitical tensions are starting to call into question the future of the post-WW2 maritime trading order.
The net effect is to scramble many of the assumptions on which prevailing economic models are built.
This is where corporate media and Wall Street I believe have missed the boat. They're applying economic models to interpret the data which are increasingly out of sync with the data. The models are making less and less sense, and so are the conclusions.
Wall Street and the financial media are globalists, staunch protagonists for free trade and a rules based order (rules for thee but not for me). Trump is dismantling the globalist system and replacing it with the Hamiltonian American system--public-private partnership to provide capital for manufacturers, producers and entrepreneurs, tariffs to protect those domestic creators of wealth, and bi-lateral partnerships with sovereign nations that benefit the working and middle classes of both countries.
I think this is why most of the old, reliable economic indicators and models have been more worthless than normal. The old paradigm is dead and the new paradigm is being created before our eyes. As the media (financial, mainstream and social) pore over the Epstein files for salacious sexual scandals of financiers, billionaires, politicians and celebrities, they are missing the revelations in the files of the 2008 financial crisis and how the elite protected themselves at the expense of the taxpayer. As always, the ladies at Promethean Action have the goods: https://www.youtube.com/watch?v=mHER7T8g1Fs
Are wage increases a part of the Producer Price? I know I saw a lot of headlines with “new hourly wage increases begin January 1” although this data is prior, but wages have been increasing, and unionization is also dramatically increasing which I would think impacts Producers and Transport etc
The Producer Price Index is an indexed aggregate measure of the prices suppliers charge for goods and services. This contrasts with the Consumer Price Index, which is an indexed aggregate measure of the prices consumers pay for goods and services.
The distinction is mostly one of timing, hence producer price inflation is also known as factory gate inflation—inflation when the product leaves the factory gate, so to speak. This distinction is also why, historically, the Producer Price Index has been viewed as a leading indicator for the Consumer Price Index; a price shift up or down in the PPI heralds a similar shift in the same direction a few months later in the CPI.
As a price Index, the PPI does not measure costs directly, including wages. That being said, increasing wages are obviously an inflationary price pressure and would be another of the myriad inflationary and deflationary forces which resolve to produce actual inflation.
Thank you for your education, you have a gift of teaching and communicating complex topics with clarity.
Thanks! I'm glad you find my work helpful.
You really are the best at analyzing hard data, Peter. I”ll bet you’ve never lost a debate in your life!
I suspect what we are seeing in the PPI is the introduction of new price pressures post-COVID which are becoming apparent in the aftermath of the 2022 hyperinflation cycle.
Exactly what those price pressures might be I have not yet worked out, but several price relationships are breaking down in recent years.
The fundamental drivers of prices and inflation have not changed, but it is becoming increasingly clear the economic environment is changing. Trade relationships are becoming frayed. Supply chains are being revealed as more brittle and more fragile than previously believed. Geopolitical tensions are starting to call into question the future of the post-WW2 maritime trading order.
The net effect is to scramble many of the assumptions on which prevailing economic models are built.
This is where corporate media and Wall Street I believe have missed the boat. They're applying economic models to interpret the data which are increasingly out of sync with the data. The models are making less and less sense, and so are the conclusions.