Here we go folks. Jumpin’ ju-ju-bones, the first wave of producer driven inflation has just been quantified.  The economic analysts are shocked, stunned, flabbergasted and surprised, because the January single month wholesale inflation of 1.0% is double what they expected.

The “producer price index” is essentially the tracking of wholesale prices at three stages: Origination (commodity), Intermediate (processing), and then Final (to wholesale). Today, the Bureau of Labor and Statistics (BLS) released January price data [Available Here] showing a dramatic 9.7% increase year-over-year in Final Demand products at the wholesale level.

Check out the single month wholesale price increases in these categories [Table 2]: Beef jumped 6.5% in January (43.9% for year). Gasoline jumped 1.9% in January, (53.9% for year).  Diesel fuel jumped 9.4% in January (56.5% for year). Cooking oil 4.7% in January (36.4% for year).  Home heating oil jumped 7.3% in January (47.4% for year).  Pasta jumped 3.0% in January (16.2% for year). Tires jumped 4.6% in January (9.0% for year). Wholesale cleaning supplies jumped 3.8% in January (34.9% for year).

Unfortunately, there is nothing upstream in the supply chain and manufacturing pipeline to suggest that higher prices at the retail level are not coming.  The price of raw materials, and the wholesale energy costs to process those materials into finished goods, are still rising.

[Modified Table-A to remove noise]

Exactly as we suspected last month, the temporary drop in gasoline was the only reason December producer inflation was not MUCH higher.  However, that said, the BLS did revise December PPI inflation slightly higher putting it at 9.8%.  The cumulative costs of energy price increases continue to drive inflation in the entire system of goods production.

Year-over-year PPI for November (7.0%), December (7.0%) and now January (6.9%), shows the overall inflation in the wholesale supply chain is structurally here to stay.  We can expect much higher prices at retail for the foreseeable future.

Keep in mind that these figures are backward looking.  In my estimation the massive price increases the bureau has just quantified in January and the preceding months is the end of the first wave of massive inflation that CTH warned about last October.

“Do what you can do now to start preparing your weekly budget in ways you may not have thought about before.   Shop sales, use coupons, look for discounts and products that can be reformulated into multiple meals or multiple uses.   Shelf-stable food products that can be muti-purposed with proteins is a good start. Consider purchasing the raw materials for cleaning products and reformulate them yourself to avoid these massive increases in petroleum costs.” [October Warning]

The recent announcement of price increases we have discussed, from food producers specifically (Kraft-Heinz, Proctor and Gamble, etc.), in combination with massive fertilizer and farming costs for future yield, is the second wave that has yet to be quantified.  The second wave of retail inflation is only just beginning to arrive now and will extend throughout the spring/summer of 2022.

CNBC economic analyst Steve Liesman is struggling to reconcile the economic data from the last three months against his own prior claims that he could not/would not believe the economy and inflation were as bad as the BLS statistics reflect.   I do not like these elitist financial analysts who have zero connection to the Main Street economy.

Today, at the end of his remarks (very end of video below), showcasing just how disconnected these analysts are, Leisman shrugs off the massive inflation impact by saying consumers seem to be “taking it just fine.” WATCH:

No doofus, we are not taking it “just fine.”

At the end of these statistics are people really suffering and trying to figure out how to take care of their families when everything costs so much.  Working people who live paycheck to paycheck are being crushed by this Bidenflation, and most people are one small event away from a major checkbook crisis.   A broken car, a drop in hours worked, or an unexpected household expense can be extremely stressful right now.   No one is taking this “just fine“, regardless of how much we have prepared for it.

I do not like these analysts.

(Business Insider) – Producer prices in the U.S. jumped by much more than expected in the month of January, according to a report released by the Labor Department on Tuesday.

The Labor Department said its producer price index for final demand surged up by 1.0 percent in January after rising by an upwardly revised 0.4 percent in December.

Economists had expected producer prices to increase by 0.5 percent compared to the 0.2 percent uptick originally reported for the previous month.

The sharp increase in producer prices was partly due to a substantial rebound in energy prices, which spiked by 2.5 percent in January after tumbling by 1.7 percent in December.

Food prices also showed a significant rebound, jumping by 1.6 percent in January after dipping by 0.3 percent in the previous month. (more)

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