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Wholesale prices rise 8.6% year over year in October, tied for highest ever

Wholesale prices rise 8.6% year over year in October, tied for highest ever

This is why we pay attention to the Economic Calendar. Input prices are certainly increasing. For those of you who don’t know what they mean by “wholesale prices,” this is the price increase of bulk goods and services businesses use to make their end product or service. As to how bad this is … I’ve never seen anything like this in my lifetime. Inflation data comes out tomorrow. … which will likely be amplified by today’s Producer Price Index. Two of the big drivers were gasoline and the cost of autos.

The big takeaway for today is that businesses are paying more for the wholesale goods they need to operate and this will likely be reflected in the CPI tomorrow. In short, the companies you are invested in will need to contend with higher input prices by increasing the cost of goods and services (or reinvesting to become more efficient) which will in turn result in the less people can afford to buy on a limited income. If this hits a tipping point where wages are increasing slowly with inflation increasing quickly, people with limited wages will be forced to buy their needs at higher prices and budget on the want side, resulting in less sales of goods people can go without.

Food for thought: To what extent does infrastructure spending help or not help the average worker (or the economy/markets for that matter) when it will result in the government competing for the same limited resources that people and businesses do, which will drive up prices? It’s a good question! It’s called “crowding out.”

submitted by /u/StockTipsTips
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