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Economy in Brief

U.S. PPI Rise Is Moderate
by Tom Moeller  June 14, 2011

The U.S. producer price index for finished goods increased just 0.2% last month, the weakest rise since July. The gain roughly matched Consensus expectations for a 0.1% uptick. Offsetting each other were a 1.5% rise in energy prices and a 1.4% decline in food. Elsewhere, price gains were moderate. The core PPI rose an expected 0.2%.

Finished consumer goods prices rose just 0.2% (9.0% y/y) with the offsetting food & energy price changes. Core prices rose 0.2% (2.7% y/y). Furniture prices rose 2.1% y/y, the strongest gain since 2009 and appliance prices rose 0.6% y/y). Men's apparel prices increased 2.4% y/y and women's clothing prices rose 1.5%. Capital equipment prices increased 0.2% last month and by an accelerated 1.3% y/y, the most since August 2009.

Intermediate goods prices jumped another 1.3% as energy prices increased 1.4% (22.3% y/y). That strength was, however, offset by a 0.4% decline in food prices (13.1% y/y). Core-intermediate prices remained firm and rose another 0.9% (6.3% y/y). Crude materials prices fell 4.1% and reversed 4.0% April jump. A moderation in factory sector growth caused a 0.9% decline in prices less food & energy. Strength in metals prices was offset by softgoods. Crude energy prices fell 5.2% (+22.5% y/y) while food prices fell 4.4% (+24.1% y/y).

The PPI data are contained in Haver's USECON database with further detail in PPI and PPIR. The expectation figure is available in the AS1REPNA database.

Producer Price Index (%) May Apr Mar May Y/Y 2010 2009 2008
Finished Goods 0.2 0.8 0.7 7.0 4.2 -2.5 6.4
    Energy 1.5 2.5 2.6 23.6 13.8 -17.7 14.1
    Food -1.4 0.3 -0.2 4.0 3.9 -1.4 6.8
  Less Food & Energy 0.2 0.3 0.3 2.1 1.2 2.5 3.4
Intermediate Goods 0.9 1.3 1.5 10.2 6.4 -8.4 10.3
  Less Food & Energy 0.9 1.1 0.9 6.3 4.3 -4.2 7.4
Crude Materials -4.1 4.0 -0.5 22.5 21.4 -30.3 21.5
  Less Food & Energy -0.9 2.6 -2.3 19.0 32.6 -23.4 14.7
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