THE INVISIBLE HAND
by Rob Kirby
KirbyAnalytics.com
December 13, 2007

Today I telephoned the good folks at the Bureau of Labor Statistics in Washington, D.C.  I phoned to find out a little bit more about how one of the key inputs – CRUDE OIL - in PPI [Producer Price Index] is determined each and every month. 

Here’s the nuts of what I was told:

“Crude oil price data inputs for the PPI are measured from sources of the subject month on the Tuesday of the week that contains the 13^th day.”

Sounds good to me.

Now, let’s take a look at a chart of one proxy for crude oil – WTI – West Texas Intermediate:

Interesting to note that in a rising market, the sample dates tend to be the “lows for the month” – consistently - even in instances when prices were higher just prior to the sample date.

Many of our financial markets clearly exhibit the finger prints of the same “Orwellian” invisible hand.

© 2007 Rob Kirby
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Rob Kirby
Kirby Analytics
Toronto, Ontario, Canada
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