Producer Price Index Sharply Higher In September – This May Be An Indicator To Tomorrow’s CPI Report

Please Note: This is the Producer Price Index (PPI), not the Consumer Price Index (CPI). The Consumer Price Indices (CPI-U, CPI-W, and C-CPI-U) will be published tomorrow, October 19, at 8:30AM EDT. I will have my 2012 COLA Watch up tomorrow night or Thursday.

What is the difference?

The CPI is a measure of the prices that businesses charge consumers. The PPI is a measure of prices that those businesses pay for raw materials that go into the goods they sell to the consumers – in effect, the wholesale cost. The PPI is usually a fair indicator of what the CPI will do.

The September PPI Report

Quotes (in italics) are from the Bureau of Labor Statistics’ news release.

The Producer Price Index for finished goods rose 0.8 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Finished goods prices were unchanged in August and increased 0.2 percent in July.

This is the largest increase in PPI since April.

In September, the increase in the index for finished goods was broad based, with prices for finished energy goods rising 2.3 percent, the index for finished goods less foods and energy moving up 0.2 percent, and prices for finished consumer foods advancing 0.6 percent.

Note that the increase in PPI was described as “broad based.” Everything is going up.

Month PPI Incr CPI-W Incr
Apr 0.8% 0.78%
May 0.1% 1.01%
Jun -0.1% -0.02%
Jul 0.2% 0.07%
Aug 0.0% 0.29%
Sep 0.8% Tomorrow

The local radio station business reporter felt that the PPI increase would show up right away in tomorrow’s CPI report.

Based on all this, I am expecting at least a moderate increase in the CPI-W tomorrow. If the increase is 0.4%, which seems entirely possible, this will be enough for a COLA of 3.7%

We’ll all know tomorrow.

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26 Responses to Producer Price Index Sharply Higher In September – This May Be An Indicator To Tomorrow’s CPI Report

  1. ooosillyme says:

    3.7%….I don’t know what to say. Too little to help? Will be offset by increasing the cost of Medicare? Will be offset for various amounts for those who get rental assistance and Food Stamps making the reality that they will actually get less income? And we are supposed to be grateful to get anything after 3 years of nothing….as prices skyrocketed?

    • revenuer says:


      I feel what you are saying and I agree. There will be a raise in Medicare premiums, but not enough to completely negate whatever COLA we may get. There is a federal law against that. The other programs you mention are state or local programs and the state makes the final determination. We don’t know what many of the states will do.

      Might I suggest that you write to your governor and tell him or her what you want and expect from the state? And while I’m at it write to your senators and congressmen and tell them what you want from them. Never underestimate the power of election year.

      • ooosillyme says:

        I spend lots of time writing to the Governor and my Senators and Representatives…of all of them, only one Senator will reply. I live in NH and rental assistance and Food Stamps are always cut by enough to make the raise more like a loss of nearly $70.00. I will continue to press the politicians with my expectations of at least a response.

      • revenuer says:

        Thanks OSM,

        I wish everyone would do that. They do not usually reply. Your own representative might depending on who they are and how they do things. I have one senator and a congressman who reply to me, both progressives. No one else does. Potluck and I called Speaker of the House Boner ( which is what I am always going to call him.) and tried to state our business and his staffer hung up on us. Really childish and ill mannered, but what can you expect from someone like Boner. We were polite, we were civil but apparently any form of disagreement is unacceptable to him.

        Still from volunteer work I used to do in campaigns I know that they keep a tally of calls, letters, emails and such so they will know how many pros and cons there are and it is usually the total of each that determines the course of action they take. Just remember that most people in power lack humanity or they would not seek power in the first place. They talk a lot about wanting to help, but it has been my experience that what they want is the power itself and all of the money and trappings that go with it.

        All in all you are doing very well to get even one answer in this political climate. I know that most states go out of their way to make sure that they cut state assistance after a COLA so that recipients never get ahead. It is one of the things I dislike most and that should be addressed on the federal level with a law that flatly says that states cannot lower their share of a person’s livelihood to negate COLAs or other raises in federal assistance. In the meantime, please keep calling and emailing. I make a kind of boilerplate email and then make it specific to each situation I use it in. It works out well and goes much more quickly that way.

  2. Mike says:

    Glad to see you were able to post today….It’s crunch time….I learned alot from you since I came across SSPotluck a few months ago. Once you stripped away all the Beauracratic gobbly-gook, looking at all those numbers was much easier to understand.
    As I had written Revenuer recently, You’se are in my Prayers.
    Take Care,

    • revenuer says:


      Thanks again. I have made Potluck aware of your kind posts and he is very grateful to you. He is beginning to feel better but is still going a little slower than he would like. You are a good person, MIke and we appreciate your comments.

  3. Rod says:

    Thanks for your continuing effort to keep us retirees up to date. Whatever the final COLA figures end up being – say, 3.7% as you estimate – what are the chances congress will NOT void this increase? I’m concerned that SS recipients may well get theirs, but the Fed retires – being fish in a barrel – will be left out. Would this even be tenable, given the election hysteria building?

    Thanks, Rod Becker

    • revenuer says:

      Hello Rod,

      Potluck heard on the radio a short time ago that an announcement about the COLA will be made tomorrow. They gave an amount of around 3%. Potluck still thinks it will be higher. I think we will all be waiting anxiously to see.

      Potluck and I were both federal employees in the time of Reagan and Clinton. The retirement systems administered by OPM use the same criteria as Social Security to figure and apply COLAs. Potluck does not think that Federal Retirees can or will be left out. We understand your concerns, though. Both Reagan and Clinton took potshots at our salaries and benefits while we were working and did irreparable damage to both. At the time this began happening we tried to warn members of the private sector that what had come to us would also come to them because that is how it always went. Heady on the derogatory crap about federal employees that they were hearing from the media and the government which was untrue, they chose to see our reduced circumstances as a good thing. Now look where they are, and Obama with the Republicans in Congress is still attacking them and trying to eliminate their jobs.

      Election time is drawing close and I think that the Occupy protests will help to soften the candidates’ stance toward the joy of screwing federal employees and all other Americans. You may or may not agree with or identify with the protesters, but I do. They are the only people who have raised their voices for us, endured physical discomfort, police brutality and repeated attacks on their integrity to stand up for the middle class and poor of all political stripes hoping to help us take back control of our government which is now owned by the rich and their corporations. They are not just young people either. There are people of all ages and states of health. I saw one picture of a very old man leaning on his walker in the park. He was wearing a sign which identified him as a World War II veteran who was standing with the protesters.

      I want my country back. I want us to have a dream and jobs to support our dreams. And I want us to be able to hope for more than a small COLA computed on dubious grounds which omit many essential expenses.

      • ooosillyme says:

        “I want my country back. I want us to have a dream and jobs to support our dreams. And I want us to be able to hope for more than a small COLA computed on dubious grounds which omit many essential expenses.”

        I can only agree here.

  4. Poppi Panama says:

    At this point I will keep on praying daily because anything is better than nothing since the COLA has not been in fruition for the past 2 years. So I just hope we are given the benefit of the doubt here even though it is election year coming I just think a lot of red tape has impeded the process of us getting COLA.

    • ssapotluck says:

      The COLA will come in January. It will be about 3 1/2% or a little more. Don’t worry about that.

    • ooosillyme says:

      i cannot understand the mentality of “better than nothing”. We are supposedly the richest country in the world and yet millions of people are willing to settle for a pittance when in reality giving us an increase to cover the actual cost of inflation would do wonders to help the economy get moving again.

      • revenuer says:


        I hear you. Everyone is different though, and some people have been so beaten down that it is almost as if they have lost the will to fight back. I guess that is why I always seem to be ranting and raving about how people can and do need to stand up and start screaming. I know you are active in letting the government know your wants and needs. I just wish everyone could see that pushing back hard is what we need to do.

  5. Poppi Panama says:

    I also need some advice on what to do since I have 3 kids and the parents are both disabled. Do I hire an attorney because the mother filed for the kids to get benefits but she was denied even though there is documentations and award letters in the custody and control of the ssa administration depicting that we are both permanently disabled?

    • ssapotluck says:


      Thank you for writing. I’m sorry it took me so long to get back to you.

      I have a couple of questions.

      1. Do you receive SSI Disability payments or SSDI benefits? Which one does your wife receive? I suspect that since she was disabled since birth, as you say, she receives just SSI. If either of you receives SSDI, then your’re right, the children should be eligible. If both of you receive SSI only, then the children won’t be eligible unless they are also blind or disabled.

      2. If either of you does receive SSDI, what did the childrens’ denial notices give as a reason for denial? Are they in the US legally? Did you provide documentation to establish that they are your children, such as a birth certificate.

      If you prefer not to discuss your business any further in public, you can email me at

      • Panama Poppi says:

        It is okay i am thanking the Lord that you are feeling much better and I pray daily for your health to continuously to improve daily. No it is okay to discuss this openly or you can email me at All I know is that she gets her benefits on the 3rd of each month. I am not sure if it is ssdi or suvivors benefits. I get the ssi on the first. The ssa office in nevada told her that she did not qualify for the benefits when she applied earlier this year to the simple notion is that no such benefit exists and they refused to allow her to provide and establish that she is the paternity mother by providing their mother is the paternal mother. Yes they are US citizens and both of us were born in the US she in Texas and myself in Tennessee. The letter was from the supervisor from the ssa office in Nevada and it simply stated that the mother is not entitled to benefits for her children. We still have a copy of the letter. You can also contact us at the email because we need help and another email is is the 2 we prefer to continue to get any insights deemed necessary. We appreciate you and keep in touch because there may be many other Americans with the same or similiar situation as ours and getting the run around and hopefully we can get the benefits for her to help with the children’s education and help toward them getting their diplomas from high school LORD’S willing. That is okay by not being able to reply it is a blessing that you a there when you can be and your help is very appreciative. Pot Luck rocks! (smile)

      • ssapotluck says:


        It’s clear now what is happening.

        Social Security administers two separate and unrelated programs with similar names. The big one is traditional Social Security itself. The second program is Supplemental Security Income (SSI). The two programs have different eligibility criteria and different rules.

        The basic requirement for traditional Social Security is that someone works and pay Social Security taxes on their work. This tax is also called FICA tax or Payroll tax. For most workers, the required amount of work is 40 quarters (which takes ten years to earn.) Social security calls the worker the “wage earner.” Once the wage earner has his 40 quarters of work, he is “fully insured” for Social Security. The wage earner can file a claim for benefits if he becomes disabled or if he retires. A young wage earner, who is insured, and who becomes disabled, will often have children and their mother or father living with him. When this worker files his claim for “disability insurance benefits” (DIB), his children and their mother are also eligible and can file applications for child’s and mother’s benefits.

        Unfortunately, this is not your wife’s situation. She is disabled from birth and never worked. She became eligible for Social Security benefits as a “childhood disability beneficiary (CDB) on either her father’s record or her mother’s record, depending on who the worker was. You refer to her benefits as “survivor’s” benefits, which also tells me she wasn’t the worker. Her children (and yours) are the grandchildren of the worker Except under very limited circumstances (which don’t appear to apply in your case) Social Security does not pay benefits to grandchildren on their grandparent’s record.

        So, there is no eligibility to children’s benefits on your wife’s record.

        You receive SSI. SSI does not have any work requirement. What it does have are limits on the amount of money and other things you can receive in a month and the amount of certain things you can own. This is called a “needs-based” program. There are no provisions in SSI to pay any dependents. Each person has to independently establish his or her own eligibility by proving that he or she is disabled or blind. This is true for your children as well.

        What your children may qualify for are various programs offered by the County Department of Public Social Service offices in Nevada. (They may have a slightly different name.) Your children should qualify for SNAP (the new name for Food Stamps), Medicaid, and TANF (cash assistance.) You should also ask about HUD Section 8 housing assistance. This program may be administered by your city’s housing authority office.

  6. Ken Connor says:

    Just announced…3.6% (Associated Press)

    • ssapotluck says:


      If I may ask, where are you located. I got my first news about 5:45 PDT.

      Thank you for thinking of us and posting what you heard as soon as you heard it.

      • Ken Connor says:

        Sioux Fall, SD Area…We are on Central Time.

        …BTW, get all healed up now… Also, thank you so much for your hard work and diligence, we really appreciate it.

        I am also a 100% Disabled Veteran, so I will be netting roughly $117 more per month. Sure, I wish it were more, but. BTW, I believe those of us recipients who are between 62 – 65 are exempt from the Medicare bump. Hooray for us, but I sure wish those eligible for Medicare didn’t have to come up with that increase.

      • revenuer says:

        Thanks Ken,

        I’m glad things turned out well for you. Not as much as we would have liked, or as much as you deserve but still I hope it helps. We don’t know yet how much the increase in the Medicare premiums will be. They will announce that later. Hope to see you for the 2013 COLA watch. We do intend to keep the COLA watches going.

  7. Panama Poppi says:

    We have their birth certificates and ss cards and she gets ssd or ssdi is that the same or no she does not get a check on the 1st because they claimed she was overpaid ssi in 2007 after she moved from texas to california and then she now stays in nevada since november of 2010.

    • ssapotluck says:

      If you’re eligible for SSI, your wife would be eligible also, if she filed an application. Her eligibility would not be based on your eligibility, but would be separately determined. Since she already receives Social Security childhood disability benefits, she would easily establish eligibility. Even if her entire check was withheld to recover an old overpayment, she would still be eligible. She would get Medicaid automatically. The State of Nevada would pay her Medicare Part B premium. She might also be eligible to SNAP (the new name for Food Stamps.) And of course, once the overpayment was recovered, she would get her full amount.

      • poppi panama says:

        Okay thanks for the insight. How you feeling? I just hope you and revenuer can get sone type of benefits regarding better transportation at a reasonable rate. Are there any volunteers services that can cater to your disabilities? To help defray the caost such as church groups etc?

      • ssapotluck says:


        Los Angeles has a transportation subsidy program. I make a small payment each quarter. They double the amount and post it to a little card which we can use to pay taxis, for things like doctor’s appointments and the like. Our market delivers our groceries for a nominal fee, so that is covered. For other help, the Multiple Sclerosis Society has contacts and referrals for places that can provide other assistance for free or for a reduced fee. We’re pretty well covered. I am feeling better now, but Revenuer is doing quite a bit worse. She is in a lot of pain. By the way, she wrote the previous message while logged in as me. Thank you for your kind thoughts and wishes.

  8. Panama Poppi says:

    Okay so it’s official there will be about a 3.6% COLA increase for 2012? Well if this stands something is better than nothing thank GOD I have 3 kids to send through elementary, middle and high school if I live long enough and stay healthy enough to do it and get through it. Or hit the lotto before the LORD calls me home.

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