Producer Price Index

August 2011 PPI was 0%

The Producer Price Index, or wholesale inflation, did not change, or zero for August 2011 finished goods. Food trumped gas as foods increased 1.1% while gas dropped -1.0%. Core PPI, which is finished goods minus food and energy, increased 0.1% and is the 9th month in a row for an increase. While this is wholesale, tire shoppers beware, 20% of core's increase was tires, up 1.4% from July.

Producer Price collapse worst since the Great Depression

This morning the Bureau of Labor Statistics reported that Producer Prices declined (-1.9%) in December. Annual PPI for 2008 was (-1.2%), the first decline since 1950.

In the last 5 months, producer prices have declined (-8.2%). This far eclipses the decline of (-3.2%) in 2001-2, and the post-WW2 decline of (-6.2%) in 1949-50.

We are witnessing the biggest price collapse since the Great Depression.