U.S. October PPI Release Canceled…BLS "Data Gap"

JH Kim

Summary

The U.S. Bureau of Labor Statistics (BLS) said it has decided not to release the October Producer Price Index (PPI).
Concerns have been raised that the absence of the PPI could increase uncertainty over the Federal Reserve (Fed)'s interest rate outlook.
It noted that as major macro indicator schedules are changed and delayed, the volatility of indicator-based trading strategies may widen toward year-end.

The U.S. Bureau of Labor Statistics (BLS) has decided not to release the October Producer Price Index (PPI). According to the economic flash account Walter Bloomberg on the 8th (local time), this decision has left one of the key indicators showing October's price trend in a gap.

The PPI measures changes in the prices of goods and services at the business stage and, along with the Consumer Price Index (CPI), is used to gauge the path of inflation. In particular, in periods when expectations for the Federal Reserve (Fed) monetary policy are sensitive, the absence of the PPI could increase uncertainty about the interest rate outlook.

Market participants note that if major inflation indicators are missing, the data available for the Fed to use in decision-making is reduced. The more inflation and employment indicators are consecutively missing, the more likely it is that the Fed will slow the pace of policy adjustments or choose more cautious communication at future meetings.

However, the non-release of the PPI is not easily interpreted as an immediate change in the inflation trend. Market participants are expected to assess the inflation trajectory by synthesizing other forthcoming price-related indicators and signals from wages, demand, and supply.

Meanwhile, as cases of changes or delays in major U.S. macroeconomic indicator schedules continue, there are also views that the volatility of indicator-based trading strategies may increase toward year-end.