Chart of the Week: Import Prices as a Leading Inflationary Indicator

PPI came in stronger than many economists expected today. However, it is no surprise to readers of Mike Panzer’s research.

His work suggests that import prices are a leading indicator of U.S. inflation. Import prices were up 1.5 percent in October, the 4th consecutive monthly advance and largest increase since May.

Inflation_import_prices
Source: Michael Panzner

This suggests that inflation is far from dormant, courtesy of increasing import prices.

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“Get inside information from the president and you will probably lose half your money. If you get it from the chairman of the board, you will lose all your money.”    
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Losing Currency

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"The dollar’s rough path just got rockier.

"Another four years of the Bush administration has heightened some fears of continually deep trade and budget deficits, weighing on the dollar’s already depleted value. Throw in high oil prices and lackluster U.S. economic growth and investors betting on the dollar may look elsewhere for better returns, which could ratchet up pressure even more on the dollar."

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Graphic courtesy WSJ
 

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