Not all that long ago, the investing community was being led to believe that the United States never would have to worry about inflation and that the U.S. economic stagnation was starting to eat into the U.S. jobs growth of recent years. Literally, it was a week ago. Now a report on wholesale inflation and a report on jobless claims are meeting to change that theme.

Thursday’s most important report was the Producer Price Index (PPI) from the U.S. Department of Labor. PPI’s headline report was up 0.5%, higher than the 0.2% expected by Dow Jones and the 0.3% expected by Thomson Reuters. The core PPI for final demand was up 0.4%, higher than the 0.1% expected by Dow Jones and Thomson Reuters. Those were the month-over-month numbers.

Where inflation looks worse is on the annualized data for June of 2016 versus June of 2015. The annual PPI for final demand was up 0.3% on the headline but up 1.3% if you back out the food and energy for that core reading.

What investors need to consider here is that the recovery in oil and commodities is really the big issue. We also have to consider that the Brexit shock had not hit the tape until the tail end of June. That means that the shocks might not be really included here, when you consider that the pre-Brexit environment was expecting everything to chug along smoothly.

Another issue to consider is that last summer was not a very exciting period, and the comparisons for higher prices today and in the coming months is effectively nothing more than a price increase off of the rapid declines that had been seen during 2015.

Many aspects of our daily lives find inflation, like rent and health insurance. Other aspects are more up to the market forces, and many of those market forces may not be dependent just on what Americans are thinking about in America. They may be influenced by Europe or in Asia.

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