Wednesday, November 14, 2007

Producer Prices & the BLS

Besides the fact that the yoy gain for PPI was over 6 percent the qulity of way too many numbers coming out from the US is "subprime"..... More on this topic also from Barry Ritholtz in Producer Prices: Tame, or Not? & PPI Follow Up

Ganz unanhängig davon das der Jahresantieg bei über satten 6% lag und die euphorischen Überschriften von gestern bestenfalls mit Unwissenheit zu erklären sind geben die veröffentlichen Zahlen speziell aus den USA erheblichen Anlaß zur Sorge. Vertrauen wird so sicher nicht aufgebaut. Und wenn man bösartig ist könnte man meinen........ :-) Hier ist mehr von Barry Ritholtz zu diesem Thema Producer Prices: Tame, or Not? & PPI Follow Up

Minyanville / PPI
Good news, they say, producer prices rose less than forecast in October, paving the way for the Federal Reserve to formally be able to justify additional interest rate cuts with a straight face.

The Producer Price Index rose 0.1% in October, according to the Labor Department.

Core producer prices, which exclude fuel and food costs, were unchanged.

A Bloomberg survey of economists showed core prices were expected to have increased 0.2%.
One of the more amazing aspects of the report was that finished good prices were led by food, not energy as one would expect.

Prices for consumer foods moved up 1.0% in October, while energy actually showed a 0.8% decrease.

According to the BLS, gasoline prices fell 3.1% in October, following September's 8.1% rise. How this occurred is something of a mystery to us, mostly because when we look at statistics from the Energy Information Administration, an organization that presumably follows energy information and then administers it to people like us... but apparently not the Bureau of Labor Statistics... we see that from October 1 to October 29, average retail gasoline prices rose across all categories - regular, conventional and reformulated.

enlarge / bigger

via Barry

The methodology for measuring PPI contains a simple and dramatic flaw: It measures prices on a single day of the month. BLS samples for energy prices on the Tuesday of the week that contains the 13th of the month. In other words, BLS’s methodology essentially ignores all energy prices paid EXCEPT FOR ONE DAY OF THE MONTH.

The consumer food increase is also interesting because price for crude foodstuffs and feedstuffs actually decreased by 1.8% in October.

>By the way these "tame" numbers send the S&P futures up to over 1490 and the Nasdaqfuture close to 2100

> Ganz nebenbei bemerkt hat diese "günstige" Entwicklung der PPI Zahlen die Futures gestern explodieren lassen. Kurzfristig......

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