Producer Prices do Little to Move the Inflation Needle

The Bureau of Labor Statistics announced this morning that, in October, the Producer Price Index rose by 0.3% and that was higher than the 0.2% that was expected, but less than September’s rise of 0.4%. Without food and energy, core PPI rose by 0.1%, falling just short of the expected 0.2% rise and also well below September’s gain of 0.4%. Year-over-year, headline PPI stands at 0.5%, just above the 0.4% pace that was expected. The twelve-month rate for core PPI fell to 1.1% from 1.2% as it was expected to remain unchanged. Later this morning, the University of Michigan will release November’s report for its Consumer Sentiment Index and a slight improvement is expected.

For now, Treasury prices are pretty flat with the Ten-Year yielding 88 basis points, the Long Bond at 1.64%, and the Two-Year holding steady at 0.17%. Crude oil has slipped to around $40.40 while gold has rallied a bit to $1,888. The DJIA is up triple-digits in pre-market trading.