Global| Mar 22 2005PPI Rose A Moderate 0.4%, Core Pricing Calmer
by:Tom Moeller
|in:Economy in Brief
Summary
The Producer Price Index for finished goods rose 0.4% last month versus Consensus expectations for a 0.3% rise. The gain equaled the average of the prior twelve months. Excluding food & energy prices rose 0.1%, calmer than the 0.8% [...]
The Producer Price Index for finished goods rose 0.4% last month versus Consensus expectations for a 0.3% rise. The gain equaled the average of the prior twelve months. Excluding food & energy prices rose 0.1%, calmer than the 0.8% spike in January and equaled Consensus expectations.
The PPI for core finished consumer goods rose 0.2% (2.8% y/y) after the prior month's 0.9% jump. Prices for tobacco products again were strong and rose 0.5% (3.7% y/y) but consumer durable prices fell 0.5% (2.3% y/y) due to lower prices for passenger cars. Capital goods prices fell 0.2% (+2.8% y/y).
Finished energy prices rose 1.4% (11.9% y/y) due to higher gasoline prices (23.7% y/y) and higher fuel oil prices (46.0% y/y). Finished food prices jumped 0.8% (+4.9% y/y).
Intermediate goods prices nearly doubled the prior month's increase and rose 0.7%. Core intermediate prices again were firm and rose 0.5%, led higher by a 6.1% (10.8% y/y) increase in prices for softwood lumber.
Crude prices fell 1.6%, down for the third straight month as core crude prices dropped 3.0%. Prices for iron & steel scrap flopped 7.1% (-3.5% y/y). During the last thirty years "core" crude prices have been a fair indicator of industrial sector activity with a 48% correlation between the six month change in core crude prices and the change in factory sector industrial production.
| Producer Price Index | Feb | Jan | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Finished Goods | 0.4% | 0.3% | 4.7% | 3.6% | 3.2% | -1.3% |
| Core | 0.1% | 0.8% | 2.8% | 1.5% | 0.2% | 0.1% |
| Intermediate Goods | 0.7% | 0.4% | 8.4% | 6.6% | 4.6% | -1.5% |
| Core | 0.5% | 0.8% | 8.1% | 5.7% | 2.0% | -0.5% |
| Crude Goods | -1.6% | -2.0% | 8.1% | 17.6% | 25.1% | -10.6% |
| Core | -3.0% | -2.5% | 5.1% | 26.5% | 12.4% | 3.8% |
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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