Wholesale price measure was flat in February, compared with expected increase

[progree]

6. GRAPHS (they provide so much additional perspective).

Last edited Thu Mar 13, 2025, 03:17 PM - Edit history (5)

I annualize them all to be easy to compare to each other, and to compare to the FED's 2% goal. I use the actual index values rather than the one-digit changes that are commonly reported in the media. Links to the data are with the graphs.

ALL the numbers are the seasonally adjusted ones

The "1 month" number is the change from January to February expressed as an annualized number.

The "3 month" number is the growth over the last 3 months (and then annualized). It is calculated based on the change in the index number between the latest one and the one 3 months previous. e.g. if the latest index value is 304 and the one 3 months previous is 300, then the 3 month increase is 1.333333%
. . . (304/300 = 1.01333333 => [subtract 1 and multiply by 100%] => 1.333333%)
Annualized, it is 5.4%
. . . (1.01333333^4 = 1.0544095 => [subtract 1 and multiply by 100%] => 5.44095% => 5.4%).
. . . Most people just multiply the 3 month increase by 4 to annualize it: 1.333333%*4 = 5.333333% => 5.3% which isn''t technically correct (it leaves out compounding) but it is close for small percentage changes.

"Regular" is the "headline" number that has "everything"

"Core" is the regular with food, energy, and trade services removed (The Fed prefers this as a basis for projecting FUTURE inflation. Backtesting has found this to be true. ).

WHOLESALE INFLATION (PPI - the Producer Price Index)

https://www.bls.gov/news.release/ppi.nr0.htm

As for which core PPI measure, since the BLS highlights the one below (without food, energy, and trade services) in its reporting (as opposed to the one without food and energy), then I guess I should do likewise. Trade services bounce around a lot from month to month, so I think excluding them from a core measure is the right thing to do.

To summarize:

Latest 3 months average annualized: Regular PPI: 4.3%,   Core PPI: 3.6%
Latest month annualized: (February over January): Regular PPI: -0.2%,   Core PPI: 2.5%

CORE PPI (excluding food, energy, trade services) through February that came out 3/13/25:
CORE PPI (seasonally adjusted) http://data.bls.gov/timeseries/WPSFD49116



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Regular PPI through February that came out 3/13/25 ( includes "everything" ):
Regular PPI (seasonally adjusted) http://data.bls.gov/timeseries/WPSFD4



If we claim February as being part of the Biden economy, then whose economy does December and January belong to?

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If one doesn't believe my graphs, one can generate their own from these links:
CORE PPI (seasonally adjusted) http://data.bls.gov/timeseries/WPSFD49116
Regular PPI (seasonally adjusted) http://data.bls.gov/timeseries/WPSFD4

For whichever link you want to check, click on the link,
near the top right side is "More Formatting Options". Click on that
On the left side of the page that appears, click on these checkboxes:
Original Data Values, 1-Month Percent Change, 3-Month Percent Change, and 12-Month Percent Change.
Change the "Specify Year Range" to 2024 to 2025
Click Retrieve Data.

They don't annualize their numbers, but one can approximately annualize their 1-month numbers by multiplying by 12, and their 3-month numbers by multiplying by 4. (see top of this post on how I annualize using the actual index numbers).

Realize they start at January 2024 (when you specify the year range as 2024 to 2025) whereas my graphs start with February 2024.

I do this sanity check every time I post graphs like these (except for the PCE inflation which is produced by the Commerce Dept and one can't generate graphs like these straight from anything I know of).

Edited to add the 12 months averages graphs (same as Year Over Year) from the BLS links using the above method

Core PPI, 12 month rolling averages:


Regular PPI 12 month rolling averages:


Latest 12 month average : Core PPI: 3.3%,   Regular PPI: 3.2%