The Return of Inflation Fears!

U.S. producer prices increased more than expected in January, likely as businesses passed on higher costs from import tariffs, suggesting inflation could pick up in the months ahead.

The Producer Price Index for final demand rose 0.5% last month after advancing by a downwardly revised 0.4% in December, the Labor Department’s Bureau of Labor Statistics said on Friday. Economists polled by Reuters had forecast the PPI gaining 0.3% after a previously reported 0.5% increase in December.

The banner headline on Drudge linked to a Reuters news story with details:

U.S. producer prices increased more than expected in January, likely as businesses passed on higher costs from import tariffs, suggesting inflation could pick up in the months ahead.

The Producer Price Index for final demand rose 0.5% last month after advancing by a downwardly revised 0.4% in December, the Labor Department’s Bureau of Labor Statistics said on Friday. Economists polled by Reuters had forecast the PPI gaining 0.3% after a previously reported 0.5% increase in December.

At that rate of increase prices end up 6.17 percent higher after 12 months. That is right back to Biden levels. And that’s producer or wholesale prices, which quickly work their way through to become consumer prices.

The inflation numbers might have been higher. However lower gasoline prices have contributed to offsetting other prices increases until now. But we expect that benefit will have dropped off in next months report as gasoline prices have now climbed to the highest level in 5 months on the prospect of yet another US regime change war in the Mideast.

Inflation is always the same old flim-flam. Even if workers get raises, they are offset at once by higher prices. Their wage gains are nominal, in name only, but not in real value, in purchasing power as the general price level rises.

After peaking at the highest levels in 40 years under Biden, inflation never went away. It merely subsided. We look at the price of gold and silver as good indicators of the future value of the government’s made-up printed money. Both gold and silver point to our currency continuing to lose value.

And not the government’s own statistics are beginning to show it, too.