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Economy in Brief

U.S. Producer Price Index Slips
by Tom Moeller  March 14, 2014

The overall final demand PPI slipped 0.1% in February (+0.9% y/y) following a 0.2% gain in January. Producer prices excluding food & energy declined 0.2% (+1.1 y/y), the first decline in six months. Final demand prices for goods (35% of the total) increased 0.4% (0.6% y/y) for the third consecutive month. It reflected a 0.6% gain (0.6% y/y) in consumer food prices. Final demand prices for energy goods increased 0.5% (-1.5% y/y). Finished consumer goods prices excluding food & energy gained 0.2% (1.2% y/y).

Final demand prices for services (63% of the total) declined 0.3% (1.0% y/y) while prices for construction final demand (2% of the total) rose 0.1% (3.2% y/y). Prices at the intermediate demand level rose 0.7% (-0.0% y/y), the strongest increase in twelve months.

Measured using the old formula, which is being phased out as the headline series, producer prices increased 0.4% in February (1.3% y/y) after a 0.6% January gain. Expectations were for a 0.2% gain. Energy prices improved 0.5% (-0.5% y/y) and food costs rose 0.7% (2.1% y/y). Prices excluding food & energy ticked up an expected 0.1% (1.7% y/y). Consumer goods prices gained 0.4% (1.3% y/y) while capital equipment prices rose 0.1% (1.2% 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 (%) Feb Jan Dec Feb Y/Y 2013 2012 2011
Final Demand -0.1 0.2 0.1 0.9 1.3 1.9 3.9
  Excluding Food & Energy -0.2 0.2 0.0 1.1 1.5 1.9 --
     Goods 0.4 0.4 0.4 0.6 0.8 1.7 6.8
       Foods 0.6 1.0 -0.4 0.6 1.6 3.0 8.5
       Energy 0.5 0.3 1.5 -1.5 -0.8 0.2 17.5
     Goods Excluding Food & Energy 0.2 0.4 0.3 1.2 1.1 1.8 3.4
   Services -0.3 0.1 -0.1 1.0 1.6 1.9 2.1
   Construction 0.1 0.6 0.0 3.2 1.8 2.9 2.2
Intermediate Demand - Processed Goods 0.7 0.6 0.5 -0.0 0.0 0.5 8.9
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