October 12, 2022, 10:55 am EDT
What Is the Inflation Condition?
“What is the Inflation Condition?” The answer is bad. According to the Producer Price Index reported today, its 0.4% for September which is higher than the estimated 0.2%. Although it came down a little on the 12-month basis to 8.5% level from 8.7%, this level of inflation measurement is still way too high compared to the target of 2% set by the Federal bank.
Recently, OPEC+ cuts its oil production only makes the situation worse. Furthermore, the Russia-Ukraine wars continue to drag the supply of food and increase the need for commodities. Strong US job data on a 3.5% unemployment rate which made about 50 years low is another driving force to boost inflation at the high level. Economic re-opening for post-COVID-19 also encourages consumers to spend their money on travel and vacation.
Extreme weather conditions like the drought in China and the western states of the US could possibly cut the supply of food products which may be another reason for the higher inflation to stay there.
Tomorrow we will see September Consumer Price Index data which is the direct measurement of inflation. It could inject another high volatility for the stock markets. Thus, it is time to tighten up the seatbelt for the ride.
