Global| Nov 14 2007U.S. PPI Total & Core Weak
by:Tom Moeller
|in:Economy in Brief
Summary
Finished producer prices ticked up just 0.1% during October following the firm 1.1% rise during September. The gain was the smallest since June and was slightly less than Consensus expectations for a 0.3% rise. Nevertheless, it lifted [...]
Finished producer prices ticked up just 0.1% during October following the firm 1.1% rise during September. The gain was the smallest since June and was slightly less than Consensus expectations for a 0.3% rise. Nevertheless, it lifted the y/y increase to 6.0% its strongest in two years.
Core finished goods producer prices were
unchanged last month. It was the first month without an increase in
prices since a slight decline this past March and it was less than the
expected 0.2% increase. Again, it left the y/y gain at 2.5% which was
its strongest in two years. The recent momentum in core producer prices
did, however, fall to its lowest of 1.0% since May.
Energy prices fell 0.8% (16.1% y/y) as prices for gasoline fell 0.8% (+32.4% y/y) after the 4.7% September jump. Natural gas prices also fell 0.5% (+7.7% y/y) but home heating oil prices increased 3.2% (16.2% y/y.
Food prices were again strong and rose 0.8% (7.1% y/y) on the heels of a 1.5% jump during September. Vegetable prices soared 29.1% (27.0% y/y) but beef prices fell 2.1% (+1.5% y/y).
Household appliance prices were firm and rose 0.4% (1.2% y/y) after two months of 0.2% decline while passenger car prices jumped 5.7% (0.4% y/y).
Capital equipment prices jumped 1.0% (2.0% y/y) reflecting
strength in most categories. 
Intermediate goods prices ticked up 0.1% and the index
excluding food & energy prices again rose a small 0.1%. Prices
for steel mill products fell 1.8%, the fourth month of sharp decline.
The crude materials PPI rose 2.4% led higher by a 3.7% (4.1% y/y) gain in crude petroleum and a 9.7% (37.6% y/y) rise in natural gas prices. The core crude materials PPI also was strong and rose 1.4%. Iron & steel scrap prices again rose 1.4% (29.8% y/y).
Today's speech by Federal Reserve Chairman Ben S. Bernanke on Federal Reserve Communications can be found here.
| Producer Price Index | October | September | Y/Y | 2006 | 2005 | 2004 |
|---|---|---|---|---|---|---|
| Finished Goods | 0.1% | 1.1% | 6.0% | 2.9% | 4.9% | 3.6% |
| Core | 0.0% | 0.1% | 2.5% | 1.4% | 2.4% | 1.5% |
| Intermediate Goods | 0.1% | 0.4% | 5.4% | 6.4% | 8.0% | 6.6% |
| Core | 0.1% | 0.1% | 1.9% | 6.0% | 5.5% | 5.7% |
| Crude Goods | 2.4% | 0.1% | 25.6% | 1.4% | 14.6% | 17.5% |
| Core | 1.4% | 1.6% | 18.8% | 20.9% | 4.9% | 26.5% |
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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