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Economy in Brief

U.S. PPI Declines Again With Lower Energy Prices
by Tom Moeller  December 13, 2012

The producer price index for finished goods fell 0.8% last month after an unrevised 0.2% October drop. The latest decline contrasted with expectations for a 0.5% drop. Prices excluding food & energy ticked up 0.1% versus expectations for a 0.2% increase. Falling 4.6% (-1.3% y/y), lower energy prices again led last month's decline reflecting an 11.2% drop (+0.1% y/y) in gasoline prices. Higher food prices countered a portion of these declines with a 1.3% increase (2.6% y/y), the sixth consecutive month of gain.

Finished consumer goods prices fell 1.1% (+1.4% y/y) but excluding food & energy, prices ticked up 0.1% (2.6% y/y). Within the components, men's apparel prices rose 5.0% y/y while women's clothing costs edged 0.2% higher y/y. Household appliance prices have gained 3.7% y/y, furniture prices rose 2.2% y/y but passenger car prices slipped 0.2% y/y. Capital equipment prices rose 0.2% last month (1.5% y/y).

Intermediate goods prices fell 1.2% (-0.2% y/y) as energy costs fell 4.9% (-3.2% y/y). Food prices were off 0.3% (+7.2% y/y). Core-intermediate prices slipped 0.1% (-0.1% y/y. Crude goods prices ticked up 0.1% (-1.8% y/y) last month as energy prices were off 0.7% (-9.5% y/y) but food prices increased  0.6% (8.6% y/y). Prices excluding food & energy were up 0.9% (-3.1% y/y). 

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

Drifting Inflation Targets and Stagflation from the Federal Reserve Bank of Kansas City is available here.

Producer Price Index (%) Nov Oct Sep Nov Y/Y 2011 2010 2009
Finished Goods -0.8 -0.2 1.1 1.4 6.0 4.2 -2.5
 Less Food & Energy 0.1 -0.2 0.0 2.2 2.4 1.2 2.6
  Foods 1.3 0.4 0.2 2.6 6.3 3.9 -1.4
  Energy -4.6 -0.5 4.7 -1.3 15.7 13.6 -17.6
Intermediate Goods -1.2 -0.1 1.5 -0.2 9.1 6.4 -8.4
 Less Food & Energy -0.1 0.0 0.6 -0.1 6.2 4.3 -4.2
Crude Goods 0.1 0.9 2.8 -1.8 17.4 21.4 -30.3
 Less Food & Energy 0.9 -1.4 1.6 -3.1 18.5 32.5 -23.3
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