Submitted by Tyler Durden on 05/15/2015 08:02 -0400
One of the major reasons for yesterday’s market surge to new record highs was the surprise drop and miss in the April wholesale inflation report, or rather make that deflation, when the BLS announced that PPI in April had dropped by 0.4%, far below expectation of a 0.1% increase, of which the BLS said “over 30 percent can be attributed to the index for gasoline, which decreased 4.7 percent.”
The implication, of course, being that with the US drifting ever further from the Fed’s desired 2% inflation threshold, not only is the probability of a June rate hike negligible, but the last time US macro data was this bad, the Fed launched QE2 (and Operation Twist… and QE3).
Which is all great, we just have one question for the BLS: just what “data” are you looking at?
Because a quick reality check reveals April gasoline prices not only did not drop 4.7%, they rose by 8%!
… leading to the following grtesque divergence between “data” from the US Department of Truth and, well, the real world.