Key U.S. economic data were released this morning. The Producer Price Index climbed 2% in November – 1.3% excluding food and energy. Also, housing starts were up 1.58 million units in November. That’s a 6.7% jump compared with a 13.7% drop in October. CNBC’s Steve Liesman and UBS Investment Research Chief U.S. Economist Maury Harris appeared on “Squawk Box” to break down the numbers.
Both Liesman and Harris are having trouble trusting the reports, saying that when the numbers are taken into context with last month, there’s no proof of a renewed inflation story.
Passenger car prices were up 2.2%. “If there’s been a dramatic turnaround in the autos industry that I’ve missed, please let me know,” Liesman said. Harris called the autos numbers “impossible to believe.” If autos are taken out of the core PPI, Harris notes that the number drops to 0.2% from 1.3%.
As for housing, don’t expect a rebound, the analysts say. November just had better weather than October, according to Harris. Also, permits – which are a more trusted indicator for the health of the sector – dropped 3% last month.
Harris also pointed out that any inflation these days is being felt by producers and not consumers – aside of energy, that is. It’s the wholesalers and retailers that are feeling the crunch.