Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Where's The Number?



The U.S. Bureau of Labor failed to release the PPI in February and there are rumors that they will not release it in March either. They claim problems in calculations, specifically in classifying certain items.

The government has been putting out these numbers for how many years? All of a sudden, are we to believe that there is some strange difficulty in reporting this very important number?

Given the seriousness of this situation and without any credible reason given for the missed release, we are forced into logical deduction. One explanation is that the number might show a problem in the inflation of commodity prices, a problem that we all "feel" is real, despite the mangled CPI numbers reported (we have commented many times that when these numbers are looked at closely, they don't reflect reality).

We do know that the PPI data is more straightforward and observable and, therefore, may be harder to manipulate than the CPI. Maybe that is why the government will not and cannot release it, at least in its current form. Perhaps a problem in calculation means that an "adjustment" would require changing the entire time series going back years to make it plausible.

A high PPI number, in conjunction with the passive CPI numbers that have been released, would be very bad indeed for the government's bullish economic case. It would indicate a very rare instance where companies are having difficulty passing through higher costs of production to customers. This is called stagflation.

Where are all the bond vigilantes, the financial media, and just plain old people like you and me that should be up in arms, demanding the release of a number?

Let us just see the numbers and let us make our own decisions. That is what our government is supposed to do.

< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos