Yes, folks the US Labor Department announced today that the January PPI moved up by the most in any one month since 1981. Prior to that the inflation records were being smashed in the 1970’s: the age of Watergate, platform shoes and disco balls. Of small comfort is that the core PPI, which excludes food and energy prices, rose 0.4%, driven by higher drug and car prices. Year over year, the PPI is up 7.4% — also the fastest pace since 1981.
The bottom line in all of this is that the Fed’s contention that inflation is under control is looking more and more like science fiction than economic fact. It will therefore be interesting to hear what Ben Bernanke has to say tomorrow at the Humphrey Hawkins testimony that he is obliged to deliver to Congress twice-yearly.