Global| Oct 15 2004Finished Producer Prices Up Slightly
by:Tom Moeller
|in:Economy in Brief
Summary
In September the finished goods PPI rose 0.1% and matched Consensus expectations. The gain followed slight decline in two of the prior three months. Less food & energy prices were a bit stronger, up 0.3%, versus expectations for a [...]
In September the finished goods PPI rose 0.1% and matched Consensus expectations. The gain followed slight decline in two of the prior three months. Less food & energy prices were a bit stronger, up 0.3%, versus expectations for a 0.2% rise.
"Core" finished consumer goods prices jumped 0.4% (2.0% y/y) on the strength of higher durable & nondurable goods prices.
Finished capital goods prices also registered a firm 0.4% (1.8% y/y) gain reflecting strength in prices of textile machinery as well as ships.
Finished energy prices fell 0.9% (9.1% y/y). Residential gas prices dropped a not seasonally adjusted 2.4% (5.7% y/y) but they have recovered in October.Gasoline prices rose a not seasonally adjusted 1.9% m/m (+18.9% y/y).
Crude prices less food & energy reversed some of the prior month's strength with a 2.5% decline. During the last thirty years "core" crude prices have been a fair indicator of activity in the industrial sector. There has been a 51% correlation between the six month change in core crude prices and the change in factory sector industrial production. Overall crude prices fell 4.2%, dragged lower by the 6.6% decline in crude energy costs.
Intermediate goods prices ticked just 0.1% higher but core intermediate prices added 0.7% to the 1.0% August jump. Industrial chemical prices continued strong.
| Producer Price Index | Sept | Aug | Y/Y | 2003 | 2002 | 2001 |
|---|---|---|---|---|---|---|
| Finished Goods | 0.1% | -0.1% | 3.3% | 3.2% | -1.3% | 2.0% |
| Core | 0.3% | -0.1% | 1.9% | 0.2% | 0.1% | 1.4% |
| Intermediate Goods | 0.1% | 1.0% | 8.3% | 4.7% | -1.5% | 0.4% |
| Core | 0.7% | 1.0% | 7.8% | 2.0% | -0.5% | -0.1% |
| Crude Goods | -4.2% | -0.7% | 14.2% | 25.1% | -10.6% | 0.3% |
| Core | -2.5% | 4.5% | 25.4% | 12.4% | 3.8% | -10.0% |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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