Summary

• The intermediate components of the PPI have some forecast power.
• Whether the full price change impact will ultimately be passed through to consumers or be absorbed in part by businesses is always unknown. A "buyer’s strike" or other behavioral changes on the part of consumers alter the final outcome.
• What we do know is that intermediate goods and services price changes lead consumer prices by a few months. The BLS has plenty of data to support this conclusion.
• The Richmond Fed and other sources help us project what lies ahead. We are not going to like the inflation coming over the summer months and into the midterm election cycle.

Cumberland Advisors’ Chief US Economist David Berson summed up the April PPI report in his morning note on May 13^th:

Slice and dice it however you want, but the April PPI was terrible. Inflation pressures are

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