"The disinflationary impact from the [coronavirus] and the crash in oil prices will exert even more downward pressure on prices."
"Inflation needs to accelerate noticeably for the Fed to consider raising interest rates, and that doesn’t appear to be in the cards."
The tepid gain in the PPE points to “relatively subdued inflation, as most of the increase was driven by volatile categories of goods and services.”
Core capital goods orders rebounded from a sharp drop in December, suggesting the slowdown in business investment may be shallow.
The biggest annual gain in the PPI since November 2011 suggests inflationary pressures are increasing amid a fast-growing economy.
The producer price index was up 3.1% in the 12 months through November — the biggest increase since January 2012.
The gain in the PPI was the largest in four months but "is unlikely to assuage Federal Reserve policymakers' concerns about low inflation."
With the PPI having increased 2.3% in the 12 months through March, inflationary pressures still appear to be heating up.
The gain in the producer price index was the largest in more than four years but the spillover to consumer inflation may be limited.
The larger-than-expected gain may signal inflationary pressures are building though the annual increase in core prices was still short of the Fed's target.
While there may be some firming in core pipeline pressures, "the headwinds from energy and food prices remain in place," an economist says.
