10-Year History of PPI Inflation: Is There a Case?
The BLS released data today on the Producer Price Index for February. Looking at the 10-year history in the graph above of annual price increases for the major components of the Producer Price Index, it seems like it would be hard to make a really strong case for producer price inflation. The crude material component of the PPI is falling, and the other components have turned up a little bit recently at annual rates, but are still below the levels in 2007, and about the same as in 2003, 2004, 2005 and 2006.
The chart below for the overall PPI annual inflation rates over the last ten years shows a similar pattern: A slight increase in recent months for PPI inflation, but still below the levels in March, April and May, below the 2008-levels, and about the same as the 2004-2005 period. And for the PPI level, 195.5 in February, that's still almost 5% below the peak of 205.5 in July 2008.
Q: Based on the data, is there really a strong case for concern about rising PPI inflation?