November PPI final demand year-over-year at 3%, the hottest since July. Core PPI (ex-food, energy, trade) at 3.5%, matching March highs.
Rick Santelli
November retail sales up 0.6% headline, strong even excluding autos and gas. Current account deficit at -$249B, significantly improved from record -$439B in Q1.
Rick Santelli
Markets not reacting to warm PPI numbers now, but they will affect it over time. Expect these numbers to push the 10-year yield to test 4.20%.
With numbers like these continuing, there's no way to get more rate cuts this year unless the labor market appears very weak.
Joe
Rick Santelli
Agrees completely. The warm year-over-year numbers mean the Fed has to 'run in place for a while' until better labor market data, which looks like it's re-accelerating.
Asks for the specific reason why the data was hotter than expected.
Joe
Rick Santelli
Cannot pinpoint a reason but suggests tariffs might be connected. Questions the accuracy of some numbers but acknowledges 'there is some smoke where there is fire.'