With the outsized jump in the PPI, the natural question to ask is whether this implies a jump in the CPI. The evidence is mixed in terms of the aggregate PPI and the aggregate CPI, as noted in this post. More recent analyses suggest the PPI contains predictive power.

Clark (1995) provides a skeptical view that PPI’s provide additional systematic predictive power. Caporale et al. (2002) uses a more formal multivariate approach to conclude that for G-7 economies, PPI’s do lead CPI’s. Whether these findings still pertain in the current environment (and using the updated versions of the PPI) remains to be seen.

Williams, (Empirical Economics, 2024) notes:

we identify several weighted disaggregated [PPI] series that unidirectionally influence or “cause” consumer price inflation providing valuable information for forecasters and policymakers. … we ascertain that three specific disaggregated producer price indices alone account for approximately two-thirds of the