Core PPI, which strips out food and energy prices, jumped 0.4%, which was hotter than the 0.2% that estimates were calling for. Year over year core producer inflation decreased from 6.7% to 6.2%. Even though this was a nice drop, it did come in higher than expectations of 5.9%. At least it is moving in the right direction and much lower than the peak that we saw in March.
This week we have the big Consumer Price Index or CPI report, which measures inflation on the consumer level and is definitely more of a report that contains more market moving potential. Analysts are anticipating a lower number on its headline and core releases. If the CPI comes in lower, this may help bond investors gain more of an appetite for purchasing which could help push longer term mortgage rates another leg lower. The next CPI release is set for December 13th, 2022.