Global| Feb 16 2011U.S. PPI Jumps Again
by:Tom Moeller
|in:Economy in Brief
Summary
The U.S. Producer Price Index for finished goods increased another 0.8% last month after a 0.9% December advance, initially reported as 1.1%. Earlier figures reflect benchmark revisions and the latest increase matched Consensus [...]
The U.S. Producer Price Index for finished goods increased another 0.8% last
month after a 0.9% December advance, initially reported as 1.1%. Earlier figures
reflect benchmark revisions and the latest increase matched Consensus
expectations. The PPI less food & energy rose a stronger 0.5% and greatly
exceeded Consensus expectations for a 0.2% increase.
Energy prices continued to pace the strength in the PPI with a 1.8% jump (9.1% y/y) as gasoline prices increased a not seasonally adjusted 5.1% (13.2% y/y). Since the late-2008 low, gasoline prices have more-than-doubled. Home heating oil prices also were strong, posting a 3.0% (18.2% y/y) increase. Natural gas prices ticked up 0.2% (-4.0% y/y) and electricity prices slipped 0.1% (+4.1% y/y). The increase in food prices eased slightly. The 0.3% gain (3.8% y/y) was the weakest since August but still reflected strength in fresh fruit & vegetable (23.3% y/y), beef & veal (17.4% y/y) and fish prices (11.6% y/y). Offsetting this strength was bakery product (1.4% y/y), pasta (0.3% y/y) and egg prices (-7.1% y/y).
Core finished consumer goods prices were strong and posted a 0.8% (2.4% y/y) jump. Prescription drug prices were firm with a 2.5% y/y gain as were tire prices, up 9.3% y/y. Furniture prices rose 1.5% y/y but passenger car prices fell 2.0%. Capital goods prices rose a moderate 0.6% y/y.
Intermediate goods prices jumped another 1.1% as energy prices rose 1.8% (8.8% y/y). That increase was accompanied by a 0.4% gain in food prices (6.8% y/y). Core-intermediate prices remained firm and jumped 1.0% (5.0% y/y). Earlier strength in crude goods pricing continued with a 3.3% gain due to a 4.3% jump (20.6% y/y) in food prices. Energy prices rose 1.9% last month but declined 4.3% versus last January. That's after the 23.3% gain for all of 2010. Continuing to reflect strength in the industrial sector, core crude prices posted a 4.0% (25.7% y/y) jump that was paced by higher iron & steel scrap (35.6% y/y), aluminum base scrap (19.8% y/y) and copper scrap (15.6% y/y) prices.
The PPI data are contained in Haver's USECON database with further detail in PPI and PPIR.
| Producer Price Index (%) | Jan | Dec | Nov | Jan Y/Y | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Finished Goods | 0.8 | 0.9 | 0.7 | 3.7 | 4.2 | -2.5 | 6.4 |
| Energy | 1.8 | 2.8 | 1.8 | 9.1 | 13.9 | -17.7 | 14.1 |
| Food | 0.3 | 0.8 | 0.9 | 3.8 | 3.9 | -1.4 | 6.8 |
| Less Food & Energy | 0.5 | 0.2 | 0.1 | 1.6 | 1.2 | 2.5 | 3.4 |
| Intermediate Goods | 1.1 | 0.9 | 1.1 | 5.9 | 6.4 | -8.4 | 10.3 |
| Less Food & Energy | 1.0 | 0.4 | 0.6 | 5.0 | 4.3 | -4.2 | 7.4 |
| Crude Materials | 3.3 | 6.5 | 1.3 | 10.3 | 21.4 | -30.3 | 21.5 |
| Less Food & Energy | 4.0 | 3.5 | 3.2 | 25.7 | 32.5 | -23.4 | 14.7 |
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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