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Economy in Brief

U.S. PPI Whipsawed By Food & Energy; Core Trends Lower
by Tom Moeller  April 12, 2013

The producer price index for finished goods fell 0.6% last month (+1.1% y/y) and reversed an unrevised 0.7% February gain. The decline exceeded expectations for a 0.2% dip. Prices excluding food & energy gained 0.2% (1.7% y/y) for the third straight month, as expected. Energy prices led the decline in overall prices with a 3.4% drop (-1.9% y/y) which reversed the 3.0% February rise. Gasoline prices fell 6.8% (-4.7% y/y) while home heating oil prices were off 7.9% (-6.2% y/y). Residential gas prices, however, spiked 2.1% (4.7% y/y). Partially offsetting the energy price weakness was a 0.8% rise (3.1% y/y) in food prices after a 0.5% February drop. Fresh fruit prices surged 5.3% (10.3% y/y) but beef costs slipped 0.1% (+6.0% y/y).

Finished consumer goods prices backpedaled 0.8% (+1.3% y/y) but excluding food & energy prices gained another 0.2% (2.4% y/y). Within the components, men's apparel prices were up 2.8% y/y while women's clothing costs increased an improved 2.3% y/y. Household appliance prices ticked up a greatly reduced 0.5% y/y, furniture prices rose a steady 2.0% y/y and passenger car prices ticked up 0.1% y/y. Capital equipment prices again edged up 0.1% (0.9% y/y).

Intermediate goods prices fell 0.9% (-0.8% y/y) as energy costs declined 4.7% (-5.4% y/y). Food prices ticked up 0.1% (4.8% y/y). Core intermediate prices rose 0.2% (0.2% y/y. Crude goods prices fell 2.5% (-0.1% y/y) last month as an 8.5% decline (-1.9% y/y) in energy prices was offset by a 1.9% rise (5.4% y/y) in food prices. Prices excluding food & energy increased 0.9% (-4.7% 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. 

Producer Price Index (%) Mar Feb Jan Mar Y/Y 2012 2011 2010
Finished Goods -0.6 0.7 0.2 1.1 1.9 6.0 4.2
  Less Food & Energy 0.2 0.2 0.2 1.7 2.6 2.4 1.2
    Foods 0.8 -0.5 0.7 3.1 2.5 6.3 3.9
    Energy -3.4 3.0 -0.4 -1.9 -0.2 15.5 13.5
Intermediate Goods -0.9 1.3 0.0 -0.8 0.5 9.0 6.4
  Less Food & Energy 0.2 0.7 0.3 0.2 0.3 6.2 4.3
Crude Goods -2.5 -0.3 0.8 -0.1 -3.2 17.4 21.3
  Less Food & Energy 0.9 -1.7 -0.3 -4.7 -5.2 18.5 32.5
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