Global| Jul 12 2013U.S. PPI Is Strengthened By Higher Energy Prices
by:Tom Moeller
|in:Economy in Brief
Summary
A surge in energy prices has changed the complexion of the U.S. inflation environment, for the worse. The producer price index for finished goods jumped 0.8% in June (1.8% y/y) following an unrevised 0.5% May increase. The gain [...]
A surge in energy prices has changed the complexion of the U.S.
inflation environment, for the worse. The producer price index for
finished goods jumped 0.8% in June (1.8% y/y) following an unrevised
0.5% May increase. The gain exceeded consensus expectations for a 0.5%
rise. Prices excluding food & energy rose 0.2% (1.6% y/y) following
two months of 0.1% uptick. Another 0.1% rise had been expected.
Higher energy prices were responsible for the strengthened PPI. Last month's 2.9% jump (4.2% y/y) followed a 1.3% May gain. Gasoline prices surged 7.2% (2.9% y/y) while home heating oil prices gained 6.1% (5.7% y/y). Electric power costs notched up 0.1% (3.0% y/y) while natural gas prices were unchanged. They have, however, surged 15.3% during the last twelve months. Food prices rose 0.2% (2.9% y/y) after a 0.6% April increase. The rise was led by a 4.7% jump (2.7% y/y) in beef & veal costs. That surge, however, was offset by a 26.9% drop (-6.3% y/y) in egg prices as well as a 0.2% slip (+1.4% y/y) in prices of processed fruits & vegetables.
Finished consumer goods prices jumped 1.1% (3.1% y/y) with the energy price gain. Prices excluding food & energy, however, rose 0.2% (2.3% y/y) following two months of 0.1% upticks. Within the components, men's clothing costs increased 2.8% y/y while women's apparel prices rose 1.8% y/y. Furniture prices gained 1.5% y/y but household appliance prices slipped 0.3% y/y. Passenger car prices were off 0.2% y/y. Capital equipment prices edged up a steady 0.1% last month (0.9% y/y).
Intermediate goods prices gained 0.5% (1.1% y/y) as energy costs recovered 2.0% (0.4% y/y). Food prices rose 0.7% (4.2% y/y) while core intermediate prices ticked up 0.1% (0.9% y/y). Crude goods prices were unchanged last month (11.0% y/y) as a 0.3% increase in energy prices (21.5% y/y) was countered by a 0.3% decline (+10.4% y/y) in food prices. Prices excluding food & energy ticked up 0.1% (-2.2% y/y).
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 (%) | Jun | May | Apr | Jun Y/Y | 2012 | 2011 | 2010 |
|---|---|---|---|---|---|---|---|
| Finished Goods | 0.8 | 0.5 | -0.7 | 2.5 | 1.9 | 6.0 | 4.2 |
| Less Food & Energy | 0.2 | 0.1 | 0.1 | 1.6 | 2.6 | 2.4 | 1.2 |
| Foods | 0.2 | 0.6 | -0.8 | 2.9 | 2.6 | 6.3 | 3.9 |
| Energy | 2.9 | 1.3 | -2.5 | 4.2 | -0.2 | 15.5 | 13.5 |
| Intermediate Goods | 0.5 | -0.0 | -0.6 | 1.1 | 0.5 | 9.0 | 6.4 |
| Less Food & Energy | 0.1 | -0.4 | -0.2 | 0.9 | 0.3 | 6.2 | 4.3 |
| Crude Goods | 0.0 | 2.2 | -0.4 | 11.0 | -3.2 | 17.4 | 21.3 |
| Less Food & Energy | 0.1 | -2.3 | -2.8 | -2.2 | -5.2 | 18.5 | 32.5 |
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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