Inflation: Worse Than CoviDOOM

Think things are bad now, inflation-wise?  You ain't seen nothin' yet.

...At Intermediate Demand Stage 1 industries, furthest up the pipeline, whose production creates the inputs for industries in Stage 2, prices exploded by 20.8% year-over-year (green line), according to the Bureau of Labor Statistics today. At Stage 2 industries, which create the inputs for industries in Stage 3, prices exploded by 28.1% year-over-year, the worst in the data going back to 2010 (red line). At Stage 3 industries, which create the inputs for Stage 4, prices exploded by 20.6% year-over-year (gray line). And at Stage 4 industries, which create inputs to Final Demand, prices shot up by 12.9% (black line):...

The chart is at the link.

It's not entirely BidenFlation--as we've said time and again.

 

...The PPI Final Demand tracks the input prices for consumer-facing industries whose prices then become part of the Consumer Price Index, which already jumped by 6.8% in November, the worst since 1982. But consumers still get to look forward to the impact of the producer prices in November that we’re looking at today.

The PPI Final Demand jumped by 0.8% in November from October. Compared to November last year, the PPI spiked by 9.7%, by far the worst ever in the data going back to 2010 (red line)....\

... In October 2020, the PPI Final Demand rose to an index value that set new highs in the data series and hasn’t looked back since. The year-over-year spike in November 2021 is based off the already record high index levels last year....

Somebody spent a helluvalotta money in '20.  And Biden* was not the President then.  

In this blog, we continue to maintain that GWBush's asinine decision to rescue the Big Banks (and the subsequent decision forcing the Fed to buy debt like crazy AND maintain ultra-low rates) plus Obama-spending--were the two necessary precursor elements.  

Trump's full employment--ironically--launched the demand SMOD which, combined with supply-chain problems, is hurtling toward the US at light speed.

And there's more.

 ...Services have caught the inflation bug, and services have nothing to do with semiconductor shortages and shipping containers. But services providers too are raising prices because they can.

The price index for Final Demand Services jumped by 0.7% in November from October, the 11th month in a row of month-to-month increases, and by 7.1% year-over-year, the highest in the data going back to 2010.

Some of the drivers in the price increases of Final Demand Services in November were portfolio management; guestroom rental services; securities brokerage, dealing, investment advice, and related services; fuels and lubricants retailing; airline passenger services; and transportation of freight services....

Calendar 2022 will be a horrible year for the fixed-income crowd and a really awful year for almost everyone else.  The ONLY good news here is that the Democrat Party will pay dearly for it.  The bad news:  fixing the problem is do-able (see Ronald Reagan) but also excruciating, so timing is everything.