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Economy in Brief

U.S. PPI Posts Minimal Increase; Core Firm
by Tom Moeller  February 16, 2012

The producer price index for finished goods ticked up 0.1% last month following an unrevised 0.1% December slip. Consensus expectations had been for a 0.4% rise, according to the Action Economics survey. Core pricing power again was firm. The PPI less food & energy rose 0.4%, its strongest gain since July. A 0.1% rise had been expected.

Lower food prices again restrained the PPI increase with a 0.3% drop (+5.3% y/y). Energy prices also fell 0.5% last month (+6.2% y/y). Gasoline prices rose 2.0% m/m and were up 11.2% y/y. However, that increase was offset by a 2.9% decline (+13.6% y/y) in home heating oil costs as well as a 3.4% drop (-6.0% y/y) in residential gas prices.

Finished consumer goods prices were unchanged (4.8% y/y) versus December. Less food & energy, consumer goods prices rose 0.5% (3.5% y/y). Within the components, men's apparel prices rose 7.5% y/y while women's clothing costs increased 1.7% y/y. Household furniture prices gained 3.0% y/y while appliance prices rose 4.4% during the last twelve months. Passenger car prices rose a moderate 1.6% y/y but tobacco prices rose 5.4% y/y. Capital equipment prices rose 0.4% last month and by 2.3% since last January.

Intermediate goods prices fell 0.4% m/m but were up a firm 4.4% y/y. Energy prices fell 1.4% last month (+8.4% y/y) and food prices slipped 0.4% (+7.2% y/y). Core-intermediate prices ticked 0.1% lower (+2.7% y/y). Crude materials prices rose 1.5% last month and increased 4.8% during the last twelve. Energy prices gained 1.6% (2.1% y/y) while food prices rose the same 1.6% (9.9% y/y). Prices less food & energy increased 0.6% m/m but were unchanged for the year.

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 (%) Jan Dec Nov Jan Y/Y 2011 2010 2009
Finished Goods 0.1 -0.1 0.2 4.1 6.0 4.2 -2.5
 Less Food & Energy 0.4 0.3 0.1 3.0 2.4 1.2 2.6
  Food -0.3 -0.9 1.2 5.3 6.3 3.9 -1.4
  Energy -0.5 -0.4 -0.4 6.2 15.7 13.6 -17.6
Intermediate Goods -0.4 -0.2 0.0 4.4 9.1 6.4 -8.4
 Less Food & Energy -0.1 -0.5 -0.4 2.7 6.2 4.3 -4.2
Crude Materials 1.5 -1.5 2.6 4.8 17.4 21.4 -30.3
 Less Food & Energy 0.6 -0.1 -2.2 0.0 18.8 32.5 -23.3
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