yikes.... what producer price inflation JUST said [summary ppi report]

Here We Go drum roll pre please for the

PPI numbers the producer price inflation

numbers come in at negative point three

oh big deflation number there for month

over month uh PPI final demand negative

point three big missed to the downside

that's very very good that's

deflationary oh here we go look at PPI

core zero PPI core comes in flat flat

instead of the 0.2 expected this is very

bullish this reiterates a Fed complete

pause right here this is a hard stop for

the FED in my opinion PBI final demand

year over year was expected to be 1.5

you actually got one point uh one

percent big Miss to the downside PPI a

less food and energy 2.8 instead of 2.9

PPI less food energy and trade year over

year you got 2.8 instead of 3.1 you did

get a match on PPI less food and energy

at 0.2 that was the expectation but you

take out food energy and trade you're

actually at zero uh oh and you got a

lower revision PPI a month over month

food energy and trade last month was 0.2

percent you just got a lower revision

from point two percent to point one

percent holy smokes the district this

inflation narrative is real uh and uh we

you could celebrate with me and of

course the course member live streams

given that we have four phases of price

increases coming up with the first price

increase on June 16th and you could

email us at staff meet kevin.com uh if

you have questions staff at meet

kevin.com courses linked down below okay

but let's get into the actual PPI report

and I want to see what Wall Street is

saying here but this is this is all a

handsome handsome handsomely positive

report this is very very good all of

these numbers good with lower revision I

mean this is the best you can ask for

PBI is a leading indicator once again

for CPI so keep that in mind as a

leading indicator for CPI in my opinion

this screams pause pause pause pause

pause to the fed this should immediately

lower over the odds of the Market's

pricing in a Fed rate hike in July we'll

see what happens it should also lower

our five-year Break Even rate our Market

expectations of inflation there's no way

inflation expectations should anchor

unanchor with this kind of uh producer

price inflation report this is excellent

news uh very good so I'm pulling up the

producer price report right now and then

we'll go through some of the details to

see where some of this this

disinflationary pressure came from uh

but I have to say this is excellent uh

you've got the cues reacting slightly to

the positive I'm not sure if uh you know

I mean less people pay attention to PPI

but you have a slight positive move on

the cues and pre-market although I

expect that a lot of your institutional

investors are going to really wait to

move for the market to open so waiting

for the BLS a website to load on PPI

it's loading a little bit slowly right

now but we'll get that document in just

a moment in the meantime I'm locked I'm

looking for any kind of reaction from

Wall Street

so far relatively quiet on the street

and uh we have uh waiting again for this

uh let's see waiting waiting waiting

okay I do have more prior revisions let

me go through some more of these prior

revisions while we wait for more data

more prior revisions year over year

number last month was 3.2 percent for

ppix food and energy came in at a

revised 3.1 percent so another revision

down PPI X food energy and trade another

revision down last month came in a 3.4

revised down to 3.3 basically everything

that was revised for last month was

revised down not only that you basically

missed on every single number except for

one which was a match everything came in

low this is absolutely phenomenal the

fact that you're at the zero percent

month over month on food energy and

trade month over month excluded from PPI

really really good uh so I mean nothing

but but positivity from this this is

very very good let's look at the actual

report now that we have it here

producer price index for final demand

declined 0.3 in May seasonally adjusted

this is amazing amazing amazing the

decline can be traced to a demand a

decline in the final demand Goods prices

which fell 1.6 Goods falling 1.6 that's

great now you did have Services

increased 0.2 percent but that's

probably this one of the slowest

increases in services that we've seen in

a minute here that's very good uh no

we've been a little slower in the past

here looking at the chart over here but

anyway point two percent that annualizes

to 2.4 percent that's not bad at all

that's very very good so let's see here

let's get into some more detail here

final demand final demand Goods move

down 1.6 in May the largest decrease

since falling 1.6 in July of 2022 most

of the May decline is attributable to a

final demand in energy which dropped 6.8

percent and this is why we look at more

of the core number right and when we

look at the core sector what else can we

see here well we could see 60 percent of

this headline number was because of a

decline in gas prices

but what else also fell

chicken eggs jet fuel fresh and dry

vegetables Iron and steel scrap also

fell however tobacco prices increased

1.7 percent and there were some

increases for electric power and for

Beverages and beverage materials

Coca-Cola actually we just went through

as a team we went through the Coca-Cola

earnings report again and they were

complaining about uh Commodities kind of

sneaking up on them a little bit so

there you go Steve look at Coca-Cola's

Commodities

uh final demand services

so uh the let's see here Services prices

for final demand Services less trade

transportation and warehousing edged up

only 0.1 percent that is not a sinus

sticky inflation the fact that the only

way you got to point two percent of an

increase was including transportation

and warehousing warehousing is basically

a negative anyway Freights in a

recession but transportation some

transportation services as we saw in CPI

were hot and if you remove these the

fact that you're only up 0.1 percent is

is insane

um uh although look at this PPI looking

at that this is actually quite

interesting Transportation might have

been hot on CPI but not over here

actually in PPI because if you just look

at transportation and warehousing you're

actually down 1.4 so scratch that that's

actually a fantastic leading indicator

for CPI that is a great great leading

indicator right here on Transportation

coming down so it must be trade trade is

the only thing really propping propping

you up over here for the the one percent

and in some other aspects for the other

one percent fine

let's try to get some more categories to

see but this does not seem broad-based

at all which is good

I'm going to jump ahead and I want to

get past the intermediate demand

categories and I'd like to get to some

of the charts where we can get a little

bit more detail on exactly where these

numbers are coming in no more revisions

so far which is good uh okay we do have

that was a very here's a little bit of a

Wall Street comment that was a very

dovish looking PPI print

uh bonds are rallying a little bit not

as much as they uh sold off yesterday

though

um so a slight move in yields but not

much so the bond market not moving much

but definitely uh being labeled a quote

very dovish PPI report uh on Wall Street

right now so looking at some of the more

particular items here what do we have so

let's see here we're going to go to the

seasonally adjusted month over month

number on the right side so our far

right column is what we want to look at

as well as the relative importance level

so you can see final demand Goods right

here down 1.6 percent that was a very

big drop food food folks down finished

consumer hold on a sec

uh that's final demand is up the top at

point three Goods is the second one

Foods 1.3 so Goods down one point six

percent Foods down 1.3 percent

a consumer Foods also down 1.3 percent

government purchases of food actually up

slightly not that that part no sorry

down point three percent

so these numbers are so tiny private

Capital Equipment up point four percent

interesting but this this is a sign of

potentially more capex wouldn't surprise

me to see this in uh yeah look at that

manufacturing businesses are investing

that's so interesting about this quote

unquote recession that we're in is

businesses are investing they don't want

to be left behind because I think they

see massive economic growth ahead and

businesses are not skimping on buying

the Machinery they need to to to win

over this next decade in this longer

term Nike Swoosh recovery so they're

continuing to invest actually keeping

pressure on Machinery private Capital

Equipment all of these over here

manufacturing non-manufacturing

manufacturing growing the most that is a

big big leading indicator here for

optimism from businesses you can't you

can't bet against this this market right

now in my opinion final demand services

super nominal very very good to see a

nominal move here

again trade of private Capital Equipment

0.9 yep that's where you're getting the

business investment where are you seeing

losses final demand for transportational

warehousing oh look at that minus one

point four percent that's great look at

all these minuses minus minus minus

minus minus minus going all the way down

over here that's warehousing uh it's a

warehousing of personal Goods it's

warehousing of Capital Equipment so in

other words the equipment doesn't have

to be Warehouse maybe it's just going to

some extent it's basically going

straight to the customer uh so you don't

have these warehousing shortages maybe

anymore the freight shortages that you

used to have this is all the sign of the

economy becoming more stable

this is great this is very very good uh

goods for X4 what do we have for X4

negative point nine percent wow so

services for export flat what kind of

services are we exporting I guess that

could be like legal consultancy or

business consultancy uh I suppose even

the courses on building your wealth are

kind of like Consulting to some extent

right remember folks first phase of the

price increase June 16th uh probably

somewhere closer to 50 bucks for each

course uh that's uh you know for for

those of you signing out up with buy now

pay later that's like a free month

basically which is pretty wild yeah and

then of course that's just going to be

the first of four price increases we're

expecting to be somewhere between 210 to

300 bucks Higher by the end of these

four price increases because that's when

we're releasing the new lectures uh for

a stocks and psych real estate theater

millionaire and the making more money

and getting sh-19 done okay continuing

here and remember to email staff at me

kevin.com if you have questions so

personal consumption negative point four

percent over here government purchases

of Defense equipment also negative for

government purchases wow where's the

heat baby where is the heat there's none

left

uh really where is the heat I I think it

was just in manufacturing equipment that

was really the hottest sector I shot saw

which again is is bullish for companies

you have a little bit of of potential

over here what is this point five

percent well let's look at this oh

that's just Services less well yeah but

that could also include some of these

Capital expenditures that's just a

category okay fine looking at some more

of the individual

items what else here yeah the

transportation of equipment or

passengers all falling great for CPI

remember CPI I want you to see that CPI

chart again let me go to the CPI chart

for a moment here so CPI CPI CPI where

is it it was this look at the CPI chart

and then transportation services right

here actually making up a big segment of

that CPI over here so uh oopsies

a big plummet here in PPI which is

actually very good that's very good you

know I don't want to sound too bullish

over here but uh this is a good report

okay let me see quickly what Wall Street

is saying Beyond this

uh PPI offers deflationary hope bonds

received a small positive jolt from PPI

which came in under expectations and

then they reiterate the numbers which I

already went through clearly the FED

will see it a lot we'll need to see a

lot more evidence of pass-through into

consumer prices to change its mindset

but this is a good start for anyone who

leans towards seeing lower rather than

higher yields moving forward

agreed agreed you have to see those

Trends you start seeing these

transportation services and that this

disinflation come over to the FED over

the CPI rather

immigrate very very good report here's

another summary of various different

stages I mean look at all the negative

negative negative negative negative

negative I want to just look at the

positives for a moment uh negative

negative and let's look at the positive

so what is this

oh these are stages construction inputs

construction inputs

construction Imports inputs

people are building people are betting

on on the next uh uh 10 years in America

that's that's for sure

there's no doubt about that so the

charts continue but I think we have a

pretty clear indication of PPI here uh

and pretty comfortable with uh with what

we see here with PPI this is fantastic I

want to just quickly reiterate the uh

and then we'll take a listen to what

CNBC is saying but to have a 0.1

expectation and then get point three is

great but more importantly that core

that that really core PPI X food energy

and trade your volatile categories

coming in not only at zero percent when

the expectation was 0.2 percent but also

having a prior revision lower

phenomenal absolutely phenomenal uh so

so we'll see how the FED ends up

reacting to this I think a lot of the

market today is going to be somewhat

concerned with just the Fed so I don't

know how much of a market mover will

actually end up getting from PPI