Global| Apr 09 2021U.S. PPI Posts Broad-Based Strength in March
by:Tom Moeller
|in:Economy in Brief
Summary
• Core finished goods inflation picks up. • Energy prices surge. • Service price inflation strengthens. The Producer Price Index for final demand jumped 1.0% (4.2% y/y) during March following a 0.5% February improvement. The index has [...]
• Core finished goods inflation picks up.
• Energy prices surge.
• Service price inflation strengthens.
The Producer Price Index for final demand jumped 1.0% (4.2% y/y) during March following a 0.5% February improvement. The index has risen at an 11.9% annual rate during the last three months. A 0.5% rise had been expected in the Action Economics Forecast Survey. The PPI excluding food & energy strengthened 0.7% (3.1% y/y) after increasing 0.2% in February. The index rose at an 8.3% annual rate during the last three months. A 0.2% rise had been expected. The PPI less food, energy & trade services rose 0.6% (3.1% y/y) after increasing 0.2% in February.
Energy prices surged 5.9% (24.3% y/y), about as they did in February. Gasoline prices increased 8.8% (52.5% y/y) while the costs of home heating oil improved 4.7% (32.9% y/y). The cost of natural gas rose 1.8% (7.6% y/y).
Food prices improved 0.5% last month (5.1% y/y) after surging 1.3% in February. Pork prices improved 4.7% (13.7% y/y) while egg prices increased 10.3% (7.9% y/y). Dairy product prices rose 0.3% (-1.9% y/y) but beef & veal prices declined 4.3% (+14.6% y/y), after spiking 13.0% in February.
The 0.7% strengthening in the core PPI reflected 0.9% rise (3.6% y/y) in goods prices less food & energy. Core government goods prices increased 1.0% (2.8% y/y). Core consumer goods prices rose 0.5% (2.2% y/y) following a 0.1% uptick. The cost of core nondurable consumer goods increased 0.5% (1.9% y/y) while durable consumer goods prices improved 0.3% (2.7% y/y). Private capital equipment prices edged 0.1% higher (1.6% y/y).
Services prices increased 0.7% (3.0%) in March following a 0.1% uptick. Trade services strengthened 1.0% (3.3% y/y) after a 0.1% improvement. The price of transportation & warehousing of finished goods for final demand surged 1.6% (6.0% y/y) following a 0.2% rise.
Construction costs rose 0.5% (1.5% y/y) following a 0.3% rise.
Intermediate goods prices surged 4.0% in March (12.5% y/y) following a 2.7% rise. These gains were bolstered by the strength in energy prices.
The PPI data are published by the Bureau of Labor Statistics and can be found in Haver's USECON database. Further detail is contained in PPI and PPIR. The expectations figures are available in the AS1REPNA database.
| Producer Price Index (SA, %) | Mar | Feb | Jan | Mar Y/Y | 2020 | 2019 | 2018 |
|---|---|---|---|---|---|---|---|
| Final Demand | 1.0 | 0.5 | 1.3 | 4.2 | 0.2 | 1.7 | 2.9 |
| Excluding Food & Energy | 0.7 | 0.2 | 1.2 | 3.1 | 0.9 | 2.1 | 2.6 |
| Excluding Food, Energy & Trade Services | 0.6 | 0.2 | 1.2 | 3.1 | 0.7 | 2.0 | 2.8 |
| Goods | 1.7 | 1.4 | 1.4 | 7.0 | -1.4 | 0.4 | 3.4 |
| Foods | 0.5 | 1.3 | 0.2 | 5.1 | 1.4 | 1.9 | 0.2 |
| Energy | 5.9 | 6.0 | 5.1 | 24.3 | -12.9 | -4.6 | 10.2 |
| Goods Excluding Food & Energy | 0.9 | 0.3 | 0.8 | 3.6 | 0.7 | 1.4 | 2.5 |
| Services | 0.7 | 0.1 | 1.3 | 3.0 | 0.9 | 2.3 | 2.6 |
| Trade Services | 1.0 | 0.1 | 1.0 | 3.3 | 1.7 | 2.4 | 1.8 |
| Construction | 0.5 | 0.3 | 0.2 | 1.5 | 2.3 | 5.0 | 4.1 |
| Intermediate Demand - Processed Goods | 4.0 | 2.7 | 1.7 | 12.5 | -2.8 | -1.4 | 5.3 |
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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