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Economy in Brief
Empire State Manufacturing Index Declines in January
The Empire State Manufacturing Index of General Business Conditions decreased to 3.5 in January...
U.S. Industrial Production Continues Recovery
Industrial production advanced 1.6% in December...
U.S. PPI Rose 0.3% in December
The Producer Price Index for final demand rose 0.3% (0.8% y/y) in December...
U.S. Business Inventories Accumulate during November as Sales Weaken
Total business inventories increased 0.5% during November (-3.2% y/y)...
The EMU Trade Surplus Stabilizes
Both exports and imports have been regaining momentum...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller September 11, 2019
The Producer Price Index for final demand edged 0.1% higher during August (1.8% y/y) following a 0.2% July rise. A 0.1% gain had been expected in the Action Economics Forecast Survey. Producer prices excluding food & energy strengthened 0.3% last month (2.3% y/y) after edging 0.1% lower in July. A 0.2% rise had been expected. The PPI excluding food, beverages and trade services, another measure of underlying price inflation, increased 0.4% (1.9% y/y) last month after easing 0.1% in July. It was the largest increase in three months.
A 2.5% decline in energy prices (-6.9% y/y) in energy prices held back the increase in the PPI overall. It reversed the July increase. The decline reflected a 6.6% fall (-7.7% y/y) in gasoline prices which followed a 5.2% rise. Home heating oil prices fell 12.1% last month (-11.0% y/y) after rising 8.0% in July. The cost of electric power rose 0.3% (2.7% y/y) after strengthening 0.9%. Offsetting this increase was a 0.4% decline in natural gas prices, which were unchanged y/y.
Also working lower last month by 0.6% (+2.4% y/y) were food prices following a 0.2% gain. Beef & veal prices increased 1.0% (4.6% y/y) while fish prices declined 1.9% (+2.4% y/y). The cost of dairy products fell 0.7% (+5.8% y/) and fresh & dried vegetable costs were off 11.8% (NSA, +12.3% y/y). Fresh fruit & melon prices also weakened by 1.6% (-10.1% y/y). Egg prices surged by 21.6% m/m (NSA), but they were down by one-third y/y. Oilseed prices strengthened 5.6% (1.8% y/y).
Prices for core goods for final demand were unchanged in August (1.0% y/y) for the fourth time in the last five months. Core finished consumer goods prices rose a steady 0.1%, but the 2.1% y/y change was reduced from 3.2% last September. Core nondurable consumer goods costs also rose a steady 0.1% and the y/y change of 2.6% y/y was similarly weakened. Durable consumer goods prices improved 0.2% and an easier 1.2% y/y. Passenger car prices improved 0.1% (-0.3% y/y) but appliance prices weakened 1.4% (+9.2 % y/y). Private capital equipment costs increased 0.1% (1.9% y/y) after rising 0.2%. Government goods prices less food & energy also rose 0.1% (1.8% y/y) following a 0.2% improvement.
Services prices strengthened 0.3% (2.7% y/y) after easing 0.1%, while trade services prices rose a steady 0.2% (3.8% y/y). The cost of trade of finished goods rose 0.2% (3.6% y/y) for a second straight month. Passenger transportation fees jumped 1.4% (7.2% y/y), about as they did in July. A 0.2% decline (+1.8% y/y) in transportation & warehousing costs offset these increases. Services prices less trade, transportation & warehousing rebounded 0.5% (2.1% y/y) following a 0.3% drop.
Construction costs edged 0.1% higher (5.4% y/y) following a 0.6% jump. Private building costs gained 0.2% (5.3% y/y) but government building costs eased 0.1% (+5.2% y/y).
Prices for intermediate demand fell 0.7% (-2.9% y/y), down for the third month in the last four.
The PPI data can be found 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, %) | Aug | Jul | Jun | Aug Y/Y | 2018 | 2017 | 2016 |
---|---|---|---|---|---|---|---|
Final Demand | 0.1 | 0.2 | 0.1 | 1.8 | 2.9 | 2.3 | 0.4 |
Excluding Food & Energy | 0.3 | -0.1 | 0.3 | 2.3 | 2.6 | 1.9 | 1.2 |
Excluding Food, Energy & Trade Services | 0.4 | -0.1 | 0.0 | 1.9 | 2.8 | 2.1 | 1.2 |
Goods | -0.5 | 0.4 | -0.4 | -0.1 | 3.4 | 3.3 | -1.4 |
Foods | -0.6 | 0.2 | 0.6 | 2.4 | 0.2 | 1.2 | -2.8 |
Energy | -2.5 | 2.3 | -3.1 | -6.9 | 10.2 | 10.4 | -8.4 |
Goods Excluding Food & Energy | 0.0 | 0.1 | 0.0 | 1.0 | 2.5 | 2.2 | 0.7 |
Services | 0.3 | -0.1 | 0.4 | 2.7 | 2.6 | 1.8 | 1.4 |
Trade Services | 0.2 | 0.2 | 1.3 | 3.8 | 1.8 | 1.4 | 1.3 |
Construction | 0.1 | 0.6 | 0.2 | 5.4 | 4.0 | 2.2 | 1.1 |
Intermediate Demand - Processed Goods | -0.7 | 0.2 | -1.1 | -2.9 | 5.3 | 4.7 | -3.1 |