Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  The Producer Price Index (PPI) Declined 0.1% in November
Posted Under: Data Watch • PPI
Supporting Image for Blog Post

 
Implications: Producer prices fell for a third straight month in November, dropping 0.1%. However, the decline in November was almost all due to falling energy costs. "Core" prices, which exclude food and energy and which the Federal Reserve follows more closely than the overall number, were up 0.1% in November. Producer prices are up 0.7% in the past year. "Core" producer prices are up 1.3% from a year ago, faster than the overall gain but not fast by the standards of the past several decades. As a result, some analysts still say the Federal Reserve has room to continue quantitative easing at the current pace of $85 billion per month. We think this would be a mistake. The problems that ail the economy are fiscal and regulatory in nature; continuing to add more excess reserves to the banking system is not going to boost economic growth, but, for the time being, it won't lift inflation either. The Fed meets next week and will release a new statement on monetary policy on Wednesday, along with an updated economic forecast and projections of future changes in short-term interest rates. Chairman Bernanke will also have a press conference where he can thoroughly explain any changes to Fed policy, or the lack thereof. At this point, we expect the Fed to use the meeting to announce the long-awaited tapering of quantitative easing and also a reduction in the unemployment threshold before the Fed will even start to consider rate hikes. Currently, the threshold is 6.5%. That will probably go down to 6% and Bernanke may hint in his press conference that the Fed has an implicit "trigger" for rate hikes when unemployment hits 5.5%. We'll be discussing the reasons for this Fed policy forecast as well as investment implications in our Monday Morning Outlook.

Click here for a PDF version
Posted on Friday, December 13, 2013 @ 10:26 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
 PREVIOUS POSTS
Retail Sales Rose 0.7% in November
Pessimists Get Desperate
Personal Income Declined 0.1% in October, Personal Consumption Rose 0.3%
Non-Farm Payrolls Increased 203,000 in November
Real GDP was Revised to a 3.6% Annual Growth Rate in Q3
The ISM Non-Manufacturing Index Declined to 53.9 in November
New Single-Family Home Sales Rose 25.4% in October to a 444K annual rate
The Trade Deficit in Goods and Services Came in at $40.6 Billion in October
The ISM Manufacturing Index Increased to 57.3 in November
Consumers Doing Fine
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011
Expand 20102010

Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.