Recent Updates

  • Euro area: Flash Consumer Confidence (Apr)
  • Ireland: Producer & Wholesale Price Indexes (Mar)
  • UK: Capital Issuance (Mar)
  • Spain: Trade in Constant Prices, Trade in Goods (Feb)
  • Germany: Federal Budget, PPI, Monthly Tax Revenue (Mar), Short-term Indicator (Feb), Public Sector Finance (Q4)
  • Colombia: Imports (Feb); Brazil: IPCA-15 (Apr)
  • Turkey: Non-Domestic PPI, House Sales, Central Government and Domestic Debt by Instrument, External Debt by Lender, Domestic
  • more updates...

Economy in Brief

U.S. Producer Prices Show Unexpected Strength
by Tom Moeller  October 18, 2011

Pricing power is up at the wholesale level. The September producer price index for finished goods jumped 0.8% after an unrevised no-change during August. The figure compared to Consensus expectations for a 0.2% rise, according to the Action Economics survey. The increase pulled the y/y change to an elevated 7.0%. There's also been acceleration in core pricing power. Less food & energy, producer prices rose 0.2% last month after a 0.1% gain in July. The rise left the twelve-month increase at 2.5%, double last year's advance.

Energy prices reversed an August decline and rose 2.3% (18.9% y/y) due to strength in gasoline (39.2% y/y) and home heating oil (39.0% y/y). Much more moderate increases in electric power (0.9% y/y) and natural gas (1.1%) have offset that strength. Food prices continued firm with a 0.6% rise (8.1% y/y). Prices for eggs rose by more-than one-third y/y while beef prices rose 16.9% y/y. Dairy prices also posted a firm 13.2% y/y gain and fresh fruit prices were up 13.2% as well.

Finished consumer goods prices jumped 1.0% (8.9% y/y) with the gain in food & energy. Elsewhere, pricing power also improved with a 0.3% m/m rise (3.2% y/y). Within the components, women's apparel prices rose 1.4% y/y after last year's 0.5% y/y decline but men's apparel costs jumped 8.7% y/y after the 0.3% 2009 uptick. Household furniture prices rose 2.2% y/y, up from 0.3% last year, and appliance prices rose 1.5% after a 0.6% fall in 2010. Passenger car prices rose 0.6% after last year's 1.4% decline and tobacco prices rose a stable and strong 6.3% y/y. Capital goods prices were unchanged last month but were up 1.7% y/y after last year's 0.4% gain.

Intermediate goods prices rose 0.6% as energy prices jumped 1.7% (20.7% y/y) and food prices rose 0.9% (14.4% y/y). Core-intermediate prices rose 0.2% (+7.5% y/y). Crude materials prices jumped 2.8% as energy prices surged 7.7% (20.3% y/y) but food prices slipped 0.9% (+21.6% y/y). Also strong were prices less food & energy which jumped 1.0% and by nearly one-quarter y/y. Raw cotton prices have been notably strong, up 27.6% y/y. Gains in prices for nonferrous metal ores (28.4% y/y), iron & steel scrap (20.7% y/y) and copper scrap (18.6% y/y) also have been elevated.

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 (%) Sep Aug Jul Sep Y/Y 2010 2009 2008
Finished Goods 0.8 0.0 0.2 7.0 4.2 -2.5 6.4
   Energy 2.3 -1.0 -0.6 18.9 13.7 -17.7 14.1
   Food 0.6 1.1 0.6 8.1 3.9 -1.4 6.8
  Less Food & Energy 0.2 0.1 0.4 2.5 1.2 2.5 3.4
Intermediate Goods 0.6 -0.5 0.2 10.8 6.4 -8.4 10.3
  Less Food & Energy 0.2 -0.1 0.2 7.5 4.3 -4.2 7.4
Crude Materials 2.8 0.2 -1.2 21.1 21.4 -30.3 21.5
  Less Food & Energy 1.0 1.6 0.7 20.8 32.6 -23.4 14.7
close
large image