Here is the more detail on the PPI that I promised in an earlier post:

I would note that of the news networks, I find that CNN is the most breathlessly optimistic, and their take on the PPI numbers is simply wrong, but even they got it a bit right about the seasonal adjustment for the end of the heating season:

The overall moderation in prices primarily reflected how the government adjusts its data to compensate for seasonal changes. Those adjustments showed gasoline prices falling last month even though motorists were seeing prices soar.

When CNN starts questioning official inflation numbers, it’s game over.

You will note that they scream to the high heavens that it’s down to 0.2%, of course the core rate is twice that, 0.4%, and the 0.2% is an artifact of already suspect seasonal adjustments.

When the total number is bad, they report core, when the core number is bad, they report total numbers, with a little caveat slipped in. CNN’s financial reporting sucked.

Barry Ritholtz puts this in some perspective:

Follow this if you will: Each year in the Spring, we get a fairly large seasonal adjustment. If memory serves, its about a ~7% increase in Energy for April. This year, however, energy prices are up so much in advance of April, that we only got a ‘modest’ one month energy increase of 5.2%. In other words, the market ran up in advance of the usual seasonal gains. Hence, a 5.2% increase looks like a reduction after seasonal adjustments. (Note: I need to double check the precise #s).

So does Dean Baker:

The core finished goods index rose by 0.4 percent in April. It has now risen at a 5.0 percent annual rate over the last quarter. The core intermediate goods index rose by 1.2 percent in April and has risen at a 12.4 percent annual rate over the last quarter. With productivity growth having slowed sharply, it is difficult to believe that these higher costs won’t be passed on at the consumer level. This is big news.

So we are looking at some very real, and very troubling inflation numbers. Barry Ritholtz has some nice graphs that I recommend.