·
In November, the PPI for finished goods rose 0.5% and again outpaced the
Consensus forecast for a 0.2% gain. Less food & energy, a 0.2% rise
in "core" prices was as expected.
· Finished energy prices added 1.8% (19.9% y/y) to the 6.8% spike in October. Residential natural gas prices jumped 8.2% (16.5% y/y), offsetting a 6.0% (47.4% y/y) decline in gasoline prices and a 6.3% (63.0% y/y) fall in fuel oil prices.
· Finished food prices increased 0.4% (3.1% y/y) on top of the 1.6% October gain. Fish prices posted a notable gain (18.3% y/y) that offset scattered declines in several other categories..
· The 0.2% increase in core finished consumer goods prices reflected a 0.3% (1.8% y/y) rise in durable goods prices that followed two months of 0.4% gain. Core consumer nondurable prices rose 0.2% (1.9% y/y) for the second consecutive month. Finished capital goods prices also rose 0.2% (2.1% y/y) after two months of 0.4% gain.
· Intermediate goods prices were
strong again and rose 0.8%, powered last month by a 10.9% (23.8%) rise
in natural gas prices paid by public utilities. Core intermediate prices
also showed some firmness and rose 0.4%.
· Crude prices jumped another 8.7%, doubling October's 4.3% gain. Core crude prices also rose strong 2.5% but the rate of gain halved versus October. Iron & steel scrap prices rose again (+84.0% y/y as did prices for copper scrap (36.8% y/y) and aluminum scrap (+12.9 y/y. During the last thirty years "core" crude prices have been a fair indicator of industrial sector activity with a 51% correlation between the six month change in core crude prices and the change in factory sector industrial production.
· "The Historical and Recent Behavior of Goods and Services Inflation" from the Federal Reserve Bank of New York can be found here.