Lou Whiteman

And that's why PPI is so important.

It acts as this very key indicator of inflation.

It tracks price fluctuations before they ever reach consumers.

So you kind of think of it as the early warning system for consumers, right?

Consumer price index tracks what you and I pay at the register.

But the producer price index, or PPI, attracts inflation to the factory floor.

So what businesses are paying for raw materials, like you just mentioned?

Fuel, wholesale supplies, before those products ever reach a store shelf.

And we are seeing astronomical spikes in the cost of energy to run factories, food ingredients for packaging, and just the baseline services required to ship goods.

And so if you're looking at this as an investor,

Whereas an everyday consumer, this is a look into the immediate future and what it spells for a lot of these different costs.

And the important thing to note is when the costs of making a product explode this quickly, most businesses can't afford to just absorb the financial hit.

And so obviously to protect their margins, they are going to eventually pass that down quickly.

to the consumer.

And I do think if you're looking at this today, it is a bit of a preview of what we're going to be seeing in terms of price hikes on grocery shelves, retail websites, at the gas pump.

I think it also underscores the fact that as robust as the stock market's performance continues to be, there is and remains a fundamental disconnect between the realized economic reality for a lot of consumers.

And that's also important to us as investors for a lot of the companies that we own and follow.

Yeah, I mean, I think there are risks and opportunities across a range of markets.

One of the things that's kind of interesting to consider is the subscription models for services like Netflix and Spotify.

Right.