PPI soars; Retail sales weak

Some economic data just hit the tape -- and it provides even more evidence that we're experiencing "stagflation lite." The details ...

* The Producer Price Index surged 1.8% in June, more than the 1.4% that was expected. The year-over-year rate of inflation is truly out of control -- 9.2%. That is up from 7.2% a month earlier and the worst reading going all the way back to June 1981. The "core" PPI was "only" up 0.2%, versus the 0.3% gain that was expected. The YOY change in the core PPI was 3%, the same as in May.

* Retail sales rose a paltry 0.1%, below the 0.4% gain that was expected. May's gain was revised down to 0.8% from 1%. Even excluding autos, sales were up just 0.8%, below forecasts for a 1% rise. There were notable declines in vehicles and parts sales (-3.3%), furniture sales (-1.4%), electronics (-0.6%), and building materials (0.9%).

* The July Empire State Manufacturing Index was actually a bit better than expected, -4.9 vs. a forecast of -8 and a prior reading of -8.7. But there too, the news on the inflation front wasn't pretty. The prices paid index shot up to 77.9 from 66.3 a month earlier, while the prices received index climbed to 32.6 from 26.7. New orders were solid (+8.3 vs. -5.5 a month earlier), but employment was weak (-6.3 vs. +1.2).