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Economy in Brief

U.S. Producer Prices Rebound
by Tom Moeller  July 16, 2014

The overall final demand Producer Price Index recovered 0.4% (1.9% y/y) during June following an unrevised 0.2% May decline. Consensus expectations were for a 0.2% gain in the Action Economics Forecast Survey. Prices excluding food & energy also recovered an expected 0.2% last month (1.8% y/y) following a 0.1% slip.

Final demand prices for goods (35% of the total index) jumped 0.5% (2.1% y/y) after a 0.2% fall. Higher finished energy prices led the gain with a 2.1% rise (2.9% y/y) after a 0.2% fall. Finished foods prices fell 0.2% (+3.5% y/y) for the second consecutive month. Private capital equipment prices increased 0.1% (1.3% y/y) for a second consecutive month.

Services prices (63% of the total index) rebounded 0.3% (1.9% y/y) after a 0.2% decline. Prices for transportation of passengers gained 0.8% (4.1% y/y) for the second consecutive month. Prices for transportation and warehousing of goods for final demand gained 0.3% (2.5% y/y) after a 0.9% jump.

Construction prices for final demand ticked 0.1% higher (3.3% y/y) for a second month.

Intermediate demand prices of processed goods recovered 0.4% (1.5% y/y) after a 0.1% slip.

Measured using the old formula, which is being phased out as the headline series, producer prices jumped 0.7% (2.7% y/y) after being unchanged in May. Food costs gained 0.3% (4.9% y/y) while energy prices recovered 2.3% (3.1% y/y). Prices excluding food & energy nudged 0.1% higher (1.9% y/y).

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

Producer Price Index (%) Jun May Apr Jun Y/Y 2013 2012 2011
Final Demand 0.4 -0.2 0.6 1.9 1.3 1.9 3.9
  Excluding Food & Energy 0.2 -0.1 0.5 1.8 1.5 1.9 --
     Goods 0.5 -0.2 0.6 2.1 0.8 1.7 6.8
       Foods -0.2 -0.2 2.7 3.5 1.7 3.0 8.5
       Energy 2.1 -0.2 0.1 2.9 -0.8 0.2 17.5
     Goods Excluding Food & Energy 0.1 0.0 0.3 1.5 1.1 1.8 3.4
   Services 0.3 -0.2 0.6 1.9 1.6 1.9 2.1
   Construction 0.1 0.1 0.4 3.3 1.8 2.9 2.2
Intermediate Demand - Processed Goods 0.4 -0.1 0.0 1.5 0.0 0.5 8.9
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