November 2022 Economic Update

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The Producer Price Index (PPI), which is a measure of inflation, had a good showing this month. It was up only 0.2% from the prior month and 8% off year over year. This is one of those “bad news is good news” scenarios that we see in today’s bizzaro economic world. 

The PPI trails the Consumer Price Index (CPI) and they slow before consumers do. 

This is another sign showing a slowing economy that is having the stock market to do an early rally up to almost 300 at the time of this writing. This is also putting downward pressure on the 10-year treasury.

You need two points to have a trend line and we got a second data point showing that the economy is slowing.

The thing we haven’t seen yet, that the Fed said they were looking for, is job loss. The job market is still incredibly tight. It will be interesting to see what the Fed does in December as now we’re starting to see signs the economy is slowing, but not the job loss yet.

Overall, this is great news for the “stop tightening” crowd (of which I am a member), and if we have a few more positive data points in the coming weeks, that will be even better.

Starting to see some rays of sunshine coming through the clouds, keep your fingers and toes crossed.

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