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Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller March 13, 2019
The headline Final Demand Producer Price Index improved 0.1% during February (1.9% y/y) following three months of slight decline. The Action Economics Forecast Survey expected a 0.2% increase. Producer prices excluding food & energy also rose 0.1% (2.5% y/y) after a 0.3% strengthening. A 0.2% gain had been anticipated. The PPI excluding food, beverages and trade services, another measure of underlying price inflation, rose 0.1% (2.3% y/y) following a 0.2% rise.
Higher energy prices pushed the PPI higher with a 1.8% increase (-6.4% y/y). It was the first rise in four months. It reflected a 3.3% gain in the cost of gasoline, which remained down 19.0% y/y. Home heating oil prices also improved 3.3% (-8.9% y/y). Natural gas prices fell 0.7% (-0.3% y/y) but the cost of electricity ticked 0.1% higher both m/m and y/y.
A 0.3% decline (+1.6% y/y) in food prices offset the rise in energy prices. It followed a 1.7% decline during January. Beef & veal prices increased 1.6% (4.0% y/y) and egg prices rose 6.7%, but remained down by one-quarter y/y. Fresh fruit prices eased 0.5% (-0.1% y/y) and dairy product costs strengthened 1.6% (3.1% y/y).
The 0.1% rise in core goods prices reflected a 0.2% gain (2.8% y/y) in finished consumer goods prices. Nondurable consumer goods costs rose 0.3% (3.1% y/y) but women's apparel prices eased 0.2% (+0.4% y/y. Durable consumer goods prices held steady (2.2% y/y) after a 0.7% jump. Appliance prices strengthened 0.5% (5.9% y/y) but light truck prices fell 0.3% (+1.1% y/y) for the third straight month. Private capital equipment prices rose 0.1% (2.7% y/y).
Services prices held steady but trade services prices fell 0.4%. Construction costs eased 0.1%.
Prices for intermediate demand strengthened 0.4% after three straight months of decline.
The PPI data using both the current and old methodology are contained in Haver's USECON database. Further detail can be found in PPI and PPIR. The expectations figures are available in the AS1REPNA database.
Producer Price Index (SA, %) | Feb | Jan | Dec | Feb Y/Y | 2018 | 2017 | 2016 |
---|---|---|---|---|---|---|---|
Final Demand | 0.1 | -0.1 | -0.1 | 1.9 | 2.9 | 2.3 | 0.4 |
Excluding Food & Energy | 0.1 | 0.3 | 0.0 | 2.5 | 2.6 | 1.9 | 1.2 |
Excluding Food, Energy & Trade Services | 0.1 | 0.2 | 0.0 | 2.3 | 2.8 | 2.1 | 1.2 |
Goods | 0.4 | -0.8 | -0.3 | 0.6 | 3.4 | 3.3 | -1.4 |
Foods | -0.3 | -1.7 | 2.6 | 1.6 | 0.2 | 1.2 | -2.8 |
Energy | 1.8 | -3.8 | -4.3 | -6.4 | 10.2 | 10.4 | -8.4 |
Goods Excluding Food & Energy | 0.1 | 0.3 | 0.1 | 2.3 | 2.5 | 2.2 | 0.7 |
Services | 0.0 | 0.3 | 0.0 | 2.5 | 2.6 | 1.8 | 1.4 |
Trade Services | -0.4 | 0.8 | -0.1 | 2.6 | 1.8 | 1.4 | 1.3 |
Construction | -0.1 | 0.6 | 0.1 | 4.8 | 4.0 | 2.2 | 1.1 |
Intermediate Demand - Processed Goods | 0.4 | -1.4 | -0.9 | 0.6 | 5.3 | 4.7 | -3.1 |