That from the Bureau of Labor Statistics' Producer Price Index report. The market did not like this at all. From INVESTORS.com:
The headline figure stunned Wall Street economists, who were expecting a much milder 0.6 percent gain in the PPI and a 0.2 percent rise in the core rate, according to a survey conducted by CBS MarketWatch...
U.S. stocks opened lower, while bond prices also fell.
As noted in this Rueters piece, the advances were broad-based.
... the core PPI, the index without the more volatile food and energy prices, rose 0.3 percent, three times higher than expected, raising concerns that the October consumer price index, due on Wednesday, would be high as well.
Of course, the commentary is all over the implications for the next monetary policy move.
If the consumer price index (CPI) due on Wednesday also comes in higher than forecast, that would reinforce expectations of a Fed hike in December and raise the risk of a move in February as well, traders and economists said.
"The measured pace of rate increases will continue with a 25 basis point rate rise in December and probably beyond that as well," said Joseph LaVorgna, senior U.S. economist at Deutsche Bank Securities.
The Federal Reserve raised interest rates on Nov. 10 and in a recent Reuters poll, 13 out of 20 top bond dealers said they expected the central bank to raise interest rates again in December.
But let's not, says INVESTORS.com, get too carried away.
"Fed policymakers will not overreact to the surge in overall producer prices, especially with energy prices having eased in recent weeks," said Steve Stanley, chief economist for RBS Greenwich Capital. "Above all, the Fed will be focused on consumer prices, which so far have remained in the middle of the Fed's perceived target range."
Ok, then. Let's see what tomorrow brings.