"Following a slightly lower than predicted rise in the Consumer Price Index yesterday, the U.S. Bureau of Labor Statistics reported Wednesday that the Producer Price Index likewise rose less than expected in December. By this measure, the annual inflation rate in December was 3%, and core inflation (which doesn't count food and energy prices) rose at a 3.5%. Both these numbers were higher than the rises in the CPI, however. Month-on-month, the PPI rose 0.2%, less than the predicted 0.3%."
"The U.S. Department of Commerce also reported on changes in retail sales in December this morning. Those rose 0.6% versus November, better than the 0.4% increase economists had predicted. In general, the data seems mixed for investors. While less bad than expected, producer costs are rising more than the prices consumers, which could hurt corporate profits. On the other hand, sales are continuing to grow - perhaps because consumers aren't yet feeling the full weight of the inflation that companies are feeling."
The Producer Price Index rose 3% year-over-year in December, with core PPI up 3.5%, and month-on-month PPI rose 0.2%, below expectations. Retail sales increased 0.6% versus November, exceeding forecasts of 0.4%. Producer costs rising faster than consumer prices could pressure corporate profits, while continued sales growth suggests consumers may not yet feel inflation fully. The Vanguard S&P 500 ETF opened 0.4% lower on the data. Citigroup and Bank of America reported quarterly earnings beats; Citigroup missed revenue forecasts while Bank of America beat both revenue and earnings estimates.
Read at 24/7 Wall St.
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