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Economy in Brief

U.S. Producer Price Index Slips With Energy Price Decline
by Tom Moeller  December 13, 2013

Price inflation at the wholesale level is virtually nonexistent. The Producer Price Index for finished goods slipped 0.1% last month (+0.7% y/y) following an unrevised 0.2% October decline. A 0.1% uptick had been expected in the Action Economics survey. Prices excluding food & energy matched expectations and ticked up 0.1% in November (1.3% y/y) after a 0.2% rise during the prior month.

Food prices were unchanged (0.6% y/y). Fresh and dry vegetables prices surged by one-third y/y while fresh egg costs gained 6.5% y/y. Dairy product prices fell 1.4% y/y as beef & veal prices were off 4.2% y/y. Energy prices fell 0.4% (-0.6% y/y). The decline was led by a 5.7% shortfall (-4.2% y/y) in home heating oil costs and a 0.7% slip (-4.6% y/y) in gasoline prices. Residential electric power costs gained 0.2% (2.2 y/y) while natural gas prices improved a minimal 0.1% (4.7% y/y).

Finished consumer goods prices excluding food & energy were unchanged (1.5% y/y) and have been for four months. Consumer durable goods prices ticked up 0.1% for a second month (0.7% y/y) but passenger car prices retreated 0.8% (-0.3% y/y). Household appliance prices gained 0.2% (-0.7% y/y). Core consumer nondurable goods prices were unchanged (2.2% y/y). Capital equipment prices nudged up 0.1% for a second month (1.0% y/y).

Intermediate goods prices were off 0.5% (-0.5% y/y) led by a 1.5% decline (-3.1% y/y) in energy costs. Intermediate food prices moved 0.9% lower (-4.1% y/y). Prices excluding food & energy again slipped 0.1% (+0.8% y/y). Crude goods prices declined 2.6% (-3.3% y/y) led by a 6.6% shortfall (+0.6% y/y) in energy prices. Crude food prices were off 0.3% (-5.8% y/y). Crude goods prices excluding food & energy improved 1.4% (-5.3% 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. 

Comments on Monetary Policy by Richard W. Fisher, President, Federal Reserve Bank of Dallas can be found here.

Producer Price Index (%) Nov Oct Sep Nov Y/Y 2012 2011 2010
Finished Goods -0.1 -0.2 -0.1 0.7 1.9 6.0 4.2
  Less Food & Energy 0.1 0.2 0.1 1.3 2.6 2.4 1.2
    Foods 0.0 0.8 -1.0 0.6 2.6 6.3 3.9
    Energy -0.4 -1.5 0.5 -0.6 -0.2 15.5 13.5
Intermediate Goods -0.5 -0.4 0.1 -0.5 0.5 9.0 6.4
  Less Food & Energy -0.1 -0.1 0.1 0.8 0.3 6.2 4.3
Crude Goods -2.6 -0.9 0.5 -3.3 -3.3 17.4 21.3
  Less Food & Energy 1.4 -0.5 -1.0 -5.3 -5.2 18.5 32.5
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