the oil shock is leaking into everything and PPI this morning is going to confirm it

Everyone is focused on CPI right now because of yesterday's 3.8% print. Fair enough. But the producer side of the equation is where you actually see inflation forming before it shows up at the register. PPI drops in about an hour and there are 3 things I've been watching that most people aren't connecting. First, Brent averaged $117 a barrel in april. That's not a march story anymore. March PPI already showed energy up 8.5% and gasoline up 15.7%, and april was significantly worse. Crude peaked at 138 on april 7th. The strait of hormuz is still effectively closed. Diesel hit 5.80 a gallon. Jet fuel is tracking even higher. This is not a one month blip, this is the pipeline repricing in real time. Second, ISM manufacturing prices paid just printed 84.6. That's not an energy-only reading. Steel hit 1,083 a ton in april, highest since early 2024. Basic organic chemicals are surging because they're derived from petrochemical feedstocks. When ISM prices are above 80 it has historically meant core goods PPI is running way hotter than people expect. And this month every single one of the 18 service industries in the ISM services survey reported rising prices. All 18. That almost never happens. Third, and this is the one nobody is pricing, transportation costs are about to blow a hole in services PPI. March already showed transportation and warehousing services up 1.3%. Fuel surcharges reprice with about a 30 day lag. April diesel at 5.80 means every trucking contract, every air freight invoice, every rail shipment got more expensive in april. Services are 65% of PPI final demand weight. When transportation starts pulling services PPI higher it mathematically moves the headline number way more than another 10% in gasoline does. The market sold off yesterday on CPI and is just vibing on Jensen going to China today. PPI this morning might remind people that the inflation is still forming upstream and hasn't even fully passed through yet.