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Economy in Brief

U.S. Producer Price Index Increases Following Four Months of Decline
by Tom Moeller  April 14, 2015

The overall Final Demand Producer Price Index increased 0.2% during March (-0.8% y/y) following an unrevised 0.5% February decline. A 0.1% uptick was expected in the Action Economics Forecast Survey. Prices excluding food & energy also gained 0.2% (0.9% y/y) following a 0.5% decline. A 0.1% rise was expected.

Final demand goods prices (34% of the total index) increased 0.3% (-4.4% y/y), led higher by a 1.5% increase (-21.7% y/y) in energy prices. Gasoline prices jumped 7.2% (-37.6% y/y) but home heating oil prices declined 1.9% (-40.0% y/y). Residential natural gas prices also fell 1.7% (-15.5% y/y) and electric power costs were off 0.6% (+2.3% y/y). Food prices dropped 0.8% (-1.4% y/y), down for the third straight month. Fish & shellfish prices collapsed 7.6% (+0.3% y/y) and dairy product prices declined 0.9% (-14.7% y/y). Beef & veal prices recovered 1.2% (15.5% y/y) and egg prices rose 1.0% (16.3% y/y). Final demand prices for goods excluding food & energy recovered 0.2% (0.5% y/y) following two months of decline. Passenger car prices recovered 1.8% (2.0% y/y) while furniture prices nudged 0.2% higher (2.0% y/y). Light motor truck prices gained 2.2% (2.7% y/y). Private capital equipment prices improved 0.5% (1.4% y/y).

Services prices (64% of the total index) improved 0.1% (1.0% y/y), the first increase in three months. Final demand trade services prices fell 0.2% (+1.3% y/y) following a 1.5% drop. Prices for transportation of passengers fell 0.3% (-2.5% y/y). Prices for transportation and warehousing of goods fell 0.2% (-0.9% y/y) off for the sixth month in the last seven.

Inching up by 0.1% for the second straight month (1.9% y/y) were construction prices for final demand (2% of the total index).

Intermediate demand prices of processed goods slipped 0.1% (-6.7% y/y), the eighth straight monthly decline.

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.

Optimal Policy and Market-Based Expectations from the Federal Reserve Bank of San Francisco is available here.

Producer Price Index (SA, %) Mar Feb Jan Mar Y/Y 2014 2013 2012
Final Demand 0.2 -0.5 -0.8 -0.8 1.6 1.3 1.9
  Excluding Food & Energy 0.2 -0.5 -0.1 0.9 1.7 1.5 1.9
     Goods 0.3 -0.4 -2.1 -4.4 1.3 0.8 1.7
       Foods -0.8 -1.6 -1.1 -1.4 3.2 1.7 3.0
       Energy 1.5 0.0 -10.3 -21.7 -1.0 -0.8 0.2
     Goods Excluding Food & Energy 0.2 -0.1 -0.2 0.5 1.5 1.1 1.8
   Services 0.1 -0.5 -0.2 1.0 1.8 1.6 1.9
   Construction 0.1 0.1 0.4 1.9 3.0 1.8 2.9
Intermediate Demand - Processed Goods -0.1 -0.6 -2.8 -6.7 0.6 0.0 0.5
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