#美国9月PPI大超预期 #美国9月CPI超预期 The Federal Reserve, Inflation, and Employment: How Ordinary People Can Understand U.S. Macroeconomic Indicators

Don’t confuse CPI, PCE, and PPI
CPI: Price changes on the consumer sideCPI, the Consumer Price Index, measures the average change in the prices of a basket of goods and services purchased by urban consumers, including food, housing, transportation, and medical care. Every household has a different consumption structure, so personal experiences and the index average may differ. The “core CPI” often mentioned in the news excludes food and energy. This does not mean eating and fueling up are unimportant; rather, prices in these two categories fluctuate significantly, so excluding them makes it easier to observe underlying price trends.
When reading inflation, you must distinguish between “year-over-year and month-over-month”:
Year-over-year: compared with the same month last year;
Month-over-month: compared with the previous month. To focus on short-term changes, look first at the seasonally adjusted month-over-month figure to reduce interference from holidays and promotions.
A common pitfall is: falling inflation = falling prices.
For example: A product rises from 100 yuan last year to 105 yuan this year (a 5% increase), then rises to 107.1 yuan the following year (a 2% increase). Falling inflation only means that the pace of price increases has slowed; prices themselves are still rising. Year-over-year figures are also affected by the base from the previous year. Looking only at a decline in year-over-year inflation can easily lead to a misjudgment of price pressures.PCE: The inflation benchmark watched by the Federal ReservePCE, the Personal Consumption Expenditures Price Index, also measures consumer prices, but its statistical coverage, weights, and calculation methods differ from those of CPI. It includes some medical expenses paid by third parties on behalf of consumers and can dynamically reflect shifts in consumer spending patterns. The two figures often differ, which does not mean the data are fabricated, nor can PCE be estimated simply by subtracting a fixed amount from CPI. The Federal Reserve’s long-term 2% inflation target refers to headline PCE; core PCE is used to observe underlying trends after excluding food and energy. Both indicators need to be considered together. One cannot look only at core figures and ignore the pressure that food and energy prices place on households.
PPI: Prices at the producer sales end, not the same as raw material costsU.S. final-demand PPI measures changes in the prices of goods and services sold by domestic producers to downstream buyers (consumption, investment, government, and exports). It includes not only industrial products but also services.
⚠️ Common misconception: treating PPI as equivalent to companies’ raw material procurement costs. When upstream prices rise, downstream companies have two choices: pass the increase on to consumers through higher prices or squeeze their own profit margins to retain orders. Demand, competition, inventories, and long-term contracts all affect price transmission. PPI cannot mechanically predict subsequent CPI, and price transmission is neither immediate nor 1:1.
To determine whether inflation has truly cooled, the key is to examine why price increases have eased: if the decline is driven only by falling oil prices, it cannot show that overall price pressures have eased; only when price increases across multiple categories of goods and services slow for several consecutive months does it indicate that the inflation trend is cooling. Compared with short-term fluctuations in a single month’s data, the range and persistence of price changes over several consecutive months matter more.
These three are all inflation thermometers: CPI looks at consumers, PPI looks at factories, and PCE is the one the Federal Reserve cares about most.
The market most often focuses on core data—excluding food and energy—because these two categories are highly volatile and can easily distort the trend.

Why they can affect the world
The key is not the numbers themselves, but how they change market expectations for Federal Reserve interest rates. The United States is the world’s largest economy, and the dollar is the world’s primary reserve currency. Whenever the Federal Reserve changes interest rates, global borrowing costs, exchange rates, and capital flows all move accordingly.
The transmission chain is roughly: inflation data → expectations for Fed rate hikes/cuts → U.S. Treasury yields → the dollar → global liquidity → repricing of various assets

How they affect financial markets
Higher-than-expected data (hot inflation): The market worries that the Federal Reserve will not cut rates and may even raise them. U.S. Treasury yields and the dollar tend to strengthen; gold, technology stocks, and small-cap stocks come under pressure.
Lower-than-expected data (cool inflation): The market bets on rate cuts. U.S. Treasury yields and the dollar may decline; U.S. stocks, emerging markets, and risk assets become more attractive to capital.
PPI above expectations: This indicates that corporate cost pressures remain, and price increases may pass through to consumer goods.
September’s year-over-year PPI of 6.3%, far above the expected 5.3%, was this kind of signal.
Sticky CPI/PCE: This indicates that end-user prices have not fully cooled. The Federal Reserve has less reason to cut rates, and higher rates lasting longer create greater pressure for highly indebted companies and countries.

Put simply, these three figures are not “just America’s business.” They are like three hands holding the dollar, U.S. Treasuries, gold, and crude oil, while also indirectly holding the prices of the RMB, Hong Kong stocks, A-shares, and commodities. #每周来晒