Global| Jun 13 2012U.S. PPI Declines But Core Price Increase Remains Steady
by:Tom Moeller
|in:Economy in Brief
Summary
The producer price index for finished goods fell 1.0% during May following an unrevised 0.2% decline during April. The latest was the largest one-month decline since July 2009. Expectations were for a 0.6% May drop. Core pricing power [...]
The producer price index for finished goods fell 1.0% during May
following an unrevised 0.2% decline during April. The latest was the
largest one-month decline since July 2009. Expectations were for a 0.6%
May drop. Core pricing power continued to firm with the economy's
recovery. The PPI less food & energy again matched expectations and
rose 0.2% after a 0.2% rise during April. The y/y gain of 2.8% was up from
2.4% during all of last year and 1.2% in 2010.
A 4.3% decline (-5.7% y/y) in energy prices accounted for most of the PPI's drop last month. Gasoline prices fell 8.7% (-8.8 y/y) but home heating oil costs rebounded 1.5% (2.8% y/y). Still falling were residential gas prices by 2.5% (-16.1% y/y) but electricity costs ticked up 0.1% (0.5% y/y). Food prices reversed two months of increase with a 0.6% drop (+3.1% y/y) reflecting a 1.1% decline in fresh eggs (-12.0% y/y) and a 3.5% plunge in beef & veal (+8.8% y/y) prices.
Finished consumer goods prices dropped 1.5% (+0.3% y/y) after a 0.3% April downturn. Less food & energy, consumer goods prices again rose 0.2% (3.3% y/y). Within the components, men's apparel prices rose 6.4% y/y while women's clothing costs increased a scant 0.4% y/y. Household appliance prices rose 4.5% since May of 2011 and passenger car prices increased 1.2% y/y. Capital equipment prices ticked up just 0.1% last month and by a steady 2.1% year-to-year.
Intermediate goods prices fell 0.8% (-0.5% y/y) with the drop in energy prices. Energy costs were off 3.3% last month and by 4.7% y/y while food prices were unchanged (2.4% y/y). Core-intermediate prices fell 0.2% and rose a negligible 0.5% y/y. Crude materials prices fell 3.2% last month and were down 8.0% year-to-year. Energy prices declined 5.0% (-17.9% y/y) while food prices were off 2.3% (-0.2% y/y). Prices less food & energy eased 1.3% and were down 3.9% versus last year.
The PPI data are contained in Haver's USECON database with further detail in PPI and PPIR. The expectations figures are available in the AS1REPNA database.
| Producer Price Index (%) | May | Apr | Mar | May Y/Y | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| Finished Goods | -1.0 | -0.2 | 0.0 | 0.8 | 6.0 | 4.2 | -2.5 |
| Less Food & Energy | 0.2 | 0.2 | 0.3 | 2.8 | 2.4 | 1.2 | 2.6 |
| Food | -0.6 | 0.2 | 0.2 | 3.1 | 6.3 | 3.9 | -1.4 |
| Energy | -4.3 | -1.4 | -1.0 | -5.7 | 15.7 | 13.6 | -17.6 |
| Intermediate Goods | -0.8 | -0.5 | 0.7 | -0.5 | 9.1 | 6.4 | -8.4 |
| Less Food & Energy | -0.2 | 0.2 | 0.6 | 0.5 | 6.2 | 4.3 | -4.2 |
| Crude Materials | -3.2 | -4.4 | -2.5 | -8.0 | 17.4 | 21.4 | -30.3 |
| Less Food & Energy | -1.3 | -1.8 | 1.1 | -3.9 | 18.5 | 32.5 | -23.3 |
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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