Global| Nov 14 2006PPI: Total & Core Fell
by:Tom Moeller
|in:Economy in Brief
Summary
The overall producer price index fell 1.6% last month, about triple Consensus expectations. Lower energy prices again lowered the total but other prices fell as well. The core PPI fell 0.9% and more than reversed the prior month's [...]
The overall producer price index fell 1.6% last month, about triple Consensus expectations. Lower energy prices again lowered the total but other prices fell as well. The core PPI fell 0.9% and more than reversed the prior month's recovery. It was the third decline in the last four months. Expectations had been for a 0.1% increase.
Finished energy goods prices fell 5.0% (-10.3% y/y), led lower by a 7.9% (-18.5% y/y) drop in gasoline prices but fuel oil prices rose 1.8% (-14.8% y/y). Natural gas prices dropped 9.3% (-19.2% y/y) and residential electric power costs fell 0.9% (+4.1% y/y).
Finished consumer goods prices less food & energy. The 0.9% (+0.7% y/y) decline in October reversed the prior month's 0.6% rise and was the third decline in the last four months.
Capital equipment prices also reversed the prior month's increase with a 0.9% (+0.6% y/y) decline as light truck prices plunged 9.7% (-12.4% y/y).
Intermediate goods prices dropped 1.1% and prices less food & energy were unchanged.
The crude materials PPI plunged 10.5% due to the 9.4% (NSA, -8.2% y/y) drop in crude petroleum and a 39.6% collapse in natural gas (NSA, -66.8% y/y). Less food & energy crude goods prices reversed all of the prior month's strength with a 1.3% drop.
| Producer Price Index | October | September | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| Finished Goods | -1.6% | -1.3% | -1.5% | 4.9% | 3.6% | 3.2% |
| Core | -0.9% | 0.6% | 0.7% | 2.4% | 1.5% | 0.2% |
| Intermediate Goods | -1.1% | -1.4% | 0.6% | 8.0% | 6.6% | 4.7% |
| Core | 0.0% | 0.1% | 5.9% | 5.5% | 5.7% | 2.0% |
| Crude Goods | -10.5% | -3.4% | -22.0% | 14.6% | 17.5% | 25.1% |
| Core | -1.3% | 1.0% | 20.0% | 4.8% | 26.5% | 12.4% |
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.
