This morning the Bureau of Labor Statistics released the September 2009 Producer Price Index report. The PPI dropped a little this month mostly due to cost of gas declines (0.6% decline). In August we saw a significant increase at 1.7% raises a little alarm in that the fluctuations are evident. The fact that most of this is based on energy prices swinging is both a little calming and potential for more signs that oil prices are moving too much.
“Wholesale prices in the U.S. unexpectedly fell in September on lower fuel costs, a sign inflation remains muted and the Federal Reserve has leeway to keep borrowing costs low as the economy recovers.” Bloomberg
What does this mean to me: we will probably not see much increase in prices over the coming months (keep watching the price of oil/gas). This is also a sign that while some of the recent indicators have been good, we might see a lull in the recovery process.
As a part of this series, I am also going to add the price of oil. It was not one of the Baumohl Indicators, but I think that might have been because it comes out of the financial markets.
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