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Economy in Brief

U.S. Producer Prices Dip
by Tom Moeller  August 10, 2017

The headline Final Demand Producer Price Index eased 0.1% during July (+1.9% y/y) after a 0.1% uptick during June. A 0.1% rise in the index had been expected in the Action Economics Forecast Survey. The PPI excluding food & energy also slipped 0.1% last month (+1.8% y/y) following a 0.1% rise. A 0.2% gain had been expected.

An updated measure of core producer price inflation is the overall index excluding food, energy and trade services. It remained unchanged last month (1.9% y/y) following a 0.2% increase.

Final demand goods prices slipped 0.1% (+2.3% y/y) following a 0.1% improvement. The price index excluding food & energy eased 0.1% (+1.9% y/y) following a 0.1% gain.

A 0.3% decline in energy prices (+4.1% y/y) followed a 0.5% June drop. Gasoline prices fell 1.4% (+2.7% y/y), the fifth decline in the last six months. Home heating oil prices weakened 3.5% (-5.3% y/y), down for the sixth straight month. Natural gas prices weakened 2.3% (+7.2% y/y). Electric power costs fell 0.2% (3.3% y/y). Food prices remained unchanged (1.0% y/y) after a 0.6% jump. Beef & veal prices fell 12.0% (1.1% y/y) reversing two months of strong increase. Egg prices fell 0.5% (-5.0% y/y). Dairy product prices eased 0.1% (+4.2% y/y) while fresh fruit & melon costs rebounded 5.1% (13.1% y/y).

Nondurable consumer goods prices less food & energy ticked 0.1% higher (3.4% y/y) after a 0.3% increase. Durable consumer goods prices fell 0.3% (+1.0% y/y), the first month of sharp decline in twelve months. Passenger car prices fell 0.9% (-0.3% y/y) and light truck prices were off 0.3% (+1.7% y/y). Capital equipment held steady (0.9% y/y) after rising 0.2%.

Final demand for services prices fell 0.2% (+1.8% y/y), the first decline since February. Trade services prices were off 0.5% (+1.4% y/y) following a 0.2% decline. Private passenger transportation prices fell 2.6% (-1.3% y/y), the fifth decline this year.

Final demand construction prices strengthened 1.2% (3.2% y/y) as prices for private capital investment weakened 1.2% (+3.1% y/y). Prices for public investment gained 1.3% (3.3% y/y).

Prices for intermediate demand for goods eased 0.1% (+3.5 y/y) following a 0.2% shortfall.

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 (SA, %) Jul Jun May Jul Y/Y 2016 2015 2014
Final Demand -0.1 0.1 0.0 1.9 0.5 -1.0 1.8
   Excluding Food & Energy -0.1 0.1 0.3 1.8 1.3 0.8 1.8
   Excluding Food, Energy & Trade Services 0.0 0.2 -0.1 1.9 1.2 0.6 1.2
   Goods -0.1 0.1 -0.5 2.3 -1.5 -4.9 1.4
      Foods 0.0 0.6 -0.2 1.9 -3.2 -3.1 3.7
      Energy -0.3 -0.5 -3.0 4.1 -8.2 -25.6 -3.2
    Goods Excluding Food & Energy -0.1 0.1 0.1 1.9 0.8 0.4 1.6
   Services -0.2 0.2 0.3 1.8 1.5 1.0 1.9
      Trade Services -0.5 -0.2 1.1 1.4 1.5 1.4 2.0
   Construction 1.2 0.2 0.1 3.2 1.3 3.2 1.9
Intermediate Demand - Processed Goods -0.1 -0.2 0.1 3.5 -5.7 -14.0 1.1
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