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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 12, 2020
The Producer Price Index for final demand declined 0.6% (+1.3% y/y) during February following a 0.5% January rise. It was the largest m/m weakening since January 2015. A 0.1% decline had been expected in the Action Economics Forecast Survey. Producer prices excluding food & energy were off 0.3% (+1.4% y/y) following a 0.5% gain. A 0.1% rise had been expected. The PPI excluding food, beverages and trade services, another measure of underlying price inflation, slipped 0.1% (+1.4% y/y) after rising 0.4% in January. It was the first monthly shortfall in three months.
Final demand goods prices less food & energy eased 0.1% (+0.5% y/y) after a 0.3% rise. The cost of finished consumer goods less food & energy held steady (1.2% y/y) for a second straight month. Core nondurable goods prices edged 0.2% higher (1.9% y/y) and durable product prices eased 0.3%, but were unchanged y/y. Private capital equipment prices also held steady (1.0% y/y) following three straight 0.1% increases.
A 0.3% decline (+1.5% y/y) in services prices for final demand followed a 0.7% increase. Trade services prices fell 0.7% (+1.3% y/y), as the cost of trade of finished goods fell 0.9%. A 0.6% decline in transportation & warehousing prices was the third decline in four months. Excluding these costs, prices eased 0.1% (+1.8% y/y) after improving 0.6%.
Food prices weakened 1.6% (+1.1% y/y) following a 0.2% rise. Final demand energy prices fell 3.6% (+0.2% y/y) as gasoline prices were off 6.5% (+9.8% y/y).
The cost of construction slipped 0.1% (+3.8% y/y) following a 0.8% rise.
Intermediate product prices fell 0.9% (-2.1% y/y) after declining 0.3%.
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, %) | Feb | Jan | Dec | Feb Y/Y | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
Final Demand | -0.6 | 0.5 | 0.2 | 1.3 | 1.7 | 2.9 | 2.3 |
Excluding Food & Energy | -0.3 | 0.5 | 0.1 | 1.4 | 2.1 | 2.6 | 1.9 |
Excluding Food, Energy & Trade Services | -0.1 | 0.4 | 0.2 | 1.4 | 2.0 | 2.9 | 2.1 |
Goods | -0.9 | 0.1 | 0.3 | 0.5 | 0.4 | 3.4 | 3.4 |
Foods | -1.6 | 0.2 | -0.3 | 1.1 | 1.8 | 0.2 | 1.2 |
Energy | -3.6 | -0.7 | 1.5 | 0.2 | -4.4 | 10.1 | 10.6 |
Goods Excluding Food & Energy | -0.1 | 0.3 | 0.2 | 0.5 | 1.4 | 2.5 | 2.2 |
Services | -0.3 | 0.7 | 0.0 | 1.5 | 2.2 | 2.6 | 1.8 |
Trade Services | -0.7 | 1.2 | -0.3 | 1.3 | 2.5 | 1.8 | 1.5 |
Construction | -0.1 | 0.8 | 0.0 | 3.8 | 4.9 | 4.1 | 2.2 |
Intermediate Demand - Processed Goods | -0.9 | -0.3 | 0.1 | -2.1 | -1.4 | 5.4 | 4.7 |