The latest PPI inflation data came out and it is going to be widely covered.
The media can’t wait to bash the Trump administration over inflation numbers.
The headline numbers were not good to say the least.
PPI 0.5% MoM, Exp. 0.3%
PPI Core 0.8% MoM, Exp. 0.5%PPI 2.9% YoY, Exp. 2.6%
PPI Core 3.6% YoY, Exp. 3.0%— zerohedge (@zerohedge) February 27, 2026
The headline numbers don’t tell the whole story.
Goods prices actually fell.
Services prices primarily drove the increase, with a 0.8% month increase that was the highest since July 2025. By contrast, goods prices actually fell 0.3%, though core goods prices rose 0.7%.
We had Chat GPT define the terms so it is easier to understand.
✅ 1. “Services prices”
This refers to the Final Demand Services index in the PPI.
It measures wholesale-level price changes for services, not physical products.
✔️ Examples of services in PPI:
Transportation (trucking, rail, air freight)
Warehousing
Retail & wholesale trade margins
Financial services
Healthcare services
Professional services
Travel & accommodations
Insurance services
📌 So “services prices rose 0.8%” means
Service providers were charging 0.8% more to businesses and consumers compared to the prior month.
✅ 2. “Goods prices”
This refers to Final Demand Goods — the headline goods index.
It measures wholesale price changes for physical products.
✔️ Examples of goods:
Food
Energy (gasoline, diesel, natural gas, electricity)
Consumer goods (appliances, electronics)
Industrial equipment
📌 “Goods prices fell 0.3%” means
Wholesale prices for physical products declined 0.3%, mostly driven by food/energy volatility.
✅ 3. “Core goods prices”
Core goods = Final Demand Goods minus food and energy.
This strips out the most volatile categories.
✔️ Core goods include things like:
Vehicles
Machinery
Appliances
Clothing
Pharmaceutical products
Electronics
Household goods
📌 “Core goods prices rose 0.7%” means
Prices for non-food, non-energy goods increased significantly.
🔥 Putting it all together (in plain English)
Services prices up 0.8%
→ The cost of services businesses provide went up a lot.
Goods prices down 0.3%
→ Overall physical goods became cheaper, mainly because energy or food fell.
Core goods up 0.7%
→ But when you remove food and energy, the underlying goods prices actually rose strongly.
This tells you the decline in overall goods prices was entirely due to food/energy — not the broader goods economy.
Truflation added more
While official PPI shows 2.9% YoY, our real-time Truflation US CPI index reads just 1.4% today, well below the Fed’s 2% target. Producer pressures aren’t fully reaching consumers yet, keeping everyday inflation cooler. Real data confirms the trend.
— Truflation (@truflation) February 27, 2026
Does this mean that the inflation report was great? No. What it means is that it is not as bad as the markets will claim it is.
