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Why Does Wednesday’s PPI Data Matter?

Tuesday brought CPI (Consumer Price Index) data for August, which details inflation at the consumer level. Wednesday will witness the release of the PPI (Producer Price Index) and that is inflation at the producer level. It is more interested in what manufacturers are paying for the raw materials that they use to manufacture the items that we buy.

This is definitely important because as the PPI presents clues about the status of the US economy, and accordingly the status of the US dollar’s strength. The PPI is also expected to show a decline for August; coming in at 8.8% – which would be down from 9.8% and this could constitute a significant move lower. Traders and investors have to wait to see how all of this data impacts the economy. The Treasury yields curve is still inverted, this is now the beginning of the 13th week with an inverted curve which only means that a recession is coming, unless someone chooses to change the definition of a recession.

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