00:00Mike McKee, PPI coming in a little bit hotter than expected.
00:04Well, actually, a lot hotter than expected, John. And as they say in the space biz, Houston,
00:09we have a problem. PPI comes in up seven tenths of a percent on a headline basis,
00:14which puts the headline number at 3.4 percent, up from 2.9 percent in January. These are February
00:21numbers. The core comes in, ex-food and energy, up half a percent. That's down a little bit from
00:27last month's eight tenths. But it moves the headline core, ex-food and energy, up to 3.9 percent.
00:35Take out trade services, and you've got a move up also of half a percent. And that puts that number
00:42at three and a half percent on a year-over-year basis. The composition of the numbers is not good
00:48either. Prices for final demand goods increased 1.1 percent. Prices for final demand services
00:56up half a percent. So a lot of inflationary numbers in the February PPI report. And what's
01:04important is this, of course, feeds into the PCE numbers that the Fed cares about. We got a light
01:10CPI last week, but the categories that feed into the PCE were high. And I would imagine that that is
01:17the same story here in the PPI. And we may be moving up from the 3.1 percent core PCE
01:24number we saw
01:24in January to a much higher number in February. And all of this before the war started.
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