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- US: Consumer Sentiment (Jan-prelim), IP & Capacity Utilization (Dec)
- Consumer Sentiment (Jan-prelim)
- US: Industrial Production Detail (Dec)
- Canada: CPI (Dec), Intl Transactions in Securities (Nov)
- Canada Regional: CPI by Province (Dec)
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Economy in Brief
Delay in Release
of Data for Construction, MSIO, Intl Trade, Wholesale Trade, Monthly Treasury, Retail Sales, Business Sales & Inventories, and Housing Starts Due to Lapse in Federal Government Funding.
Philadelphia Fed Manufacturing Index Rebounds; Pricing Pressure Eases
The Philadelphia Fed reported that its General Factory Sector Business Conditions Index increased to 17.0 during January...
U.S. Initial Unemployment Insurance Claims Slip
Initial claims for jobless insurance eased to 213,000 (-2.6% y/y) during the week ended January 12...
Passenger Car Registrations Hold to Low Ground in Europe
Passenger car registrations in Europe fell on a year-over-year comparison for the fourth consecutive months in December...
U.S. Import Prices Pulled Lower by Falling Oil Prices
Import prices fell 1.0% during December following a 1.8% November decline...
by Tom Moeller November 15, 2005
The overall Producer Price Index rose another 0.7% last month on top of the 1.9% September spike. The latest by far exceeded Consensus expectations for no change in prices.
The strength last month was led by a 12.3% (50.4% y/y) rise in home heating oil prices and a 12.7% (38.9% y/y) jump in natural gas which more than offset the 3.3% (+40.3% y/y) decline in gasoline.
Price inflation at the so called "core" level nevertheless eased a bit last month as a 0.3% decline in prices less food & energy reversed all of the prior month's gain. Consensus expectations for a 0.2% increase.
Core finished consumer goods prices fell 0.2% (+2.0% y/y). Durable goods prices dropped 0.9% (+0.2% y/y) led by a 3.0% (-2.1% y/y) decline in passenger car prices as well as weakness in prices for home electronics (-2.0% y/y), carpets (+6.1% y/y) and home appliances (+1.7% y/y). Core consumer nondurable goods prices rose 0.2% (3.5% y/y) for the second consecutive month.
"Spillover" effects from the past strength in oil prices continued to be evident at the earlier stages of processing. Intermediate goods prices jumped 3.0% on top of the 2.5% September surge while core intermediate goods prices repeated their 1.2% spike of the prior month.
Crude energy prices gained 12.4% (69.4% y/y) as natural gas prices soared an unadjusted 20.3% (120.4% y/y). The gain lifted overall crude prices 6.7% though core crude prices reversed some of their September strength with a 1.2% decline. During the last thirty years "core" crude prices have been a fair indicator of industrial sector activity with a 48% correlation between the six month change in core crude prices and the change in factory sector industrial production.
| Producer Price Index | Oct | Sept | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Finished Goods | 0.7% | 1.9% | 5.9% | 3.6% | 3.2% | -1.3% |
| Core | -0.3% | 0.3% | 2.0% | 1.5% | 0.2% | 0.1% |
| Intermediate Goods | 3.0% | 2.5% | 10.5% | 6.6% | 4.6% | -1.5% |
| Core | 1.2% | 1.2% | 4.3% | 5.7% | 2.0% | -0.5% |
| Crude Goods | 6.7% | 10.2% | 31.5% | 17.5% | 25.1% | -10.6% |
| Core | -1.2% | 5.3% | 0.9% | 26.6% | 12.4% | 3.8% |
