The Producer Price Index, which measures wholesale inflation, was unchanged for the month of November.  Year over year, PPI decreased 0.3% to 0.9%, which was lower than the 1% estimate. Core PPI, which strips out food and energy prices, was was also flat month over month, which was below expectations calling for 0.2% gain. Year over year Core PPI decreased 0.4% to 2%, which was lower than the 2.2% estimate.  The core number is higher than the headline figure because the cost of gasoline at the pump is down 8.4% from 30 days ago, oil is down 11.56% from last month, natural gas has fallen 58.38% since last year.

Where PPI is seen as a precursor to coming CPI reports, and inflation at the producer level is 50% lower than what we consumers are experiencing still, the Fed will officially end 2023 with a “no change” to monetary policy when they release their statement here in about 45 minutes as we continue to “wait and see” the effects of hitherto fore implemented tightening.