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Economy in Brief

U.S. PPI Declines For Third Straight Month With Lower Energy Costs
by Tom Moeller  January 15, 2013

The producer price index for finished goods declined 0.2% last month (+1.3% y/y) after an unrevised 0.8% November drop. Expectations had been for a 0.1% slip. For the full year price rose 1.9%. Prices excluding food & energy ticked up 0.1% (2.0% y/y) for a second month versus expectations for a 0.2% rise. For 2012 prices increased 2.0%. A 0.3% slip (-1.3% y/y) in energy prices led last month's decline reflecting a 1.7% drop (-0.6% y/y) in gasoline prices. Food prices were weak as well, off 0.9% (+2.3% y/y) following six consecutive months of gain.

Finished consumer goods prices slipped 0.3% (+1.3% y/y) but excluding food & energy, prices increased 0.2% (2.6% y/y). Within the components, men's apparel prices rose 5.3% y/y and women's clothing costs increased an accelerated 1.5% y/y. Household appliance prices have gained 4.0% y/y, furniture prices rose 2.2% y/y and passenger car prices edged up 0.3% y/y. Capital equipment prices slipped 0.1% last month (+1.4% y/y).

Intermediate goods prices gained 0.3% (0.3% y/y) as energy costs rose 0.9% (-3.1% y/y). Lower food prices, off 0.9% (+7.1% y/y), offset the gain. Core-intermediate prices recovered 0.2% (0.7% y/y. Crude goods prices jumped 2.5% (1.54% y/y) last month as energy prices surged 7.2% (-4.5% y/y) but food prices were off 1.1% (+10.6% y/y). Prices excluding food & energy surged 1.1% (-1.4% 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. 

China's Impact on U.S. Inflation from the Federal Reserve Bank of New York is available here.

Producer Price Index (%) Dec Nov Oct Dec Y/Y 2012 2011 2010
Finished Goods -0.2 -0.8 -0.2 1.3 1.9 6.0 4.2
 Less Food & Energy 0.1 0.1 -0.2 2.0 2.6 2.4 1.2
  Foods -0.9 1.3 0.4 2.3 2.6 6.3 3.9
  Energy -0.3 -4.6 -0.5 -1.3 -0.2 15.5 13.6
Intermediate Goods 0.3 -1.2 -0.1 0.3 0.5 9.0 6.4
 Less Food & Energy 0.2 -0.1 0.0 0.7 0.3 6.2 4.3
Crude Goods 2.5 0.1 0.9 1.4 -3.1 17.4 21.4
 Less Food & Energy 1.1 0.9 -1.4 -1.4 -5.1 18.5 32.5
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