Global| Aug 14 2015U.S. Producer Price Inflation Eases but Core Prices Firm
by:Tom Moeller
|in:Economy in Brief
Summary
The overall Final Demand Producer Price Index increased 0.2% during July (-0.8% y/y) following an unrevised 0.4% June rise. A 0.1% uptick was expected in the Action Economics Forecast Survey. Prices excluding food & energy also were [...]
The overall Final Demand Producer Price Index increased 0.2% during July (-0.8% y/y) following an unrevised 0.4% June rise. A 0.1% uptick was expected in the Action Economics Forecast Survey. Prices excluding food & energy also were stronger than expectations, rising 0.3% (0.6% y/y) for a second straight month. A 0.1% uptick had been expected.
Final demand goods prices (35% of the total index) eased 0.1% (-3.7% y/y) after a 0.7% rise. The decline was paced by a 0.6% decline in energy prices (-17.9% y/y) which followed two straight months of notably strong gains. Home heating oil costs retreated 9.5% (-36.7% y/y) after a 0.6% dip. Natural gas prices backpedaled 2.4% (-14.4% y/y) following a 3.1% jump. To the upside, gasoline prices gained 1.5% (-28.1% y/y) following strength earlier this year. Electric power costs edged up 0.1% (1.9% y/y) after a 1.3% jump. Food prices eased 0.1% (-2.8% y/y) after two months of strong increase. Egg prices backed off by roughly one quarter but still were up 46.2% y/y. Dairy product costs eased 0.2% (-12.3% y/y). Beef & veal prices remained unchanged (2.1% y/y) and pasta product prices increased 1.3% (8.8% y/y).
Final demand goods prices excluding food & energy remained unchanged (0.5% y/y) after two months of increase. Nondurable goods prices eased 0.2% (+3.8% y/y) after a 1.1% jump. Durable consumer goods prices gained 0.3% (1.7% y/y) after a 0.1% uptick. Light truck prices gained 0.2% (3.8% y/y) but passenger car prices improved 0.6% (1.8% y/y) following a 0.2% decline. Furniture prices improved 0.2% (1.6% y/y) following two months of decline. Private capital equipment costs increased 0.2% (1.4% y/y), the strongest gain since February.
Final demand services costs (63% of the total index) increased 0.4% (0.6% y/y), the largest increase in nine months. Transportation of passengers prices improved 0.9% (-3.6% y/y), adding to June's 0.5% rise. Trade services costs rose 0.4% (0.1% y/y), the third consecutive monthly gain.
Final demand construction prices (2.0% of the index) jumped 0.5% (2.0% y/y), the strongest gain in nine months.
Prices for intermediate demand posted a second month of strength with a 0.7% rise (-6.3% 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 (SA, %) | Jul | Jun | May | Jul Y/Y | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| Final Demand | 0.2 | 0.4 | 0.5 | -0.8 | 1.6 | 1.3 | 1.9 |
| Excluding Food & Energy | 0.3 | 0.3 | 0.1 | 0.6 | 1.7 | 1.5 | 1.9 |
| Goods | -0.1 | 0.7 | 1.3 | -3.7 | 1.3 | 0.8 | 1.7 |
| Foods | -0.1 | 0.6 | 0.8 | -2.8 | 3.2 | 1.7 | 3.0 |
| Energy | -0.6 | 2.4 | 5.9 | -17.6 | -1.0 | -0.8 | 0.2 |
| Goods Excluding Food & Energy | 0.0 | 0.4 | 0.2 | 0.5 | 1.5 | 1.1 | 1.8 |
| Services | 0.4 | 0.3 | 0.0 | 0.6 | 1.8 | 1.6 | 1.9 |
| Construction | 0.5 | 0.1 | 0.1 | 2.0 | 3.0 | 1.8 | 2.9 |
| Intermediate Demand - Processed Goods | -0.2 | 0.7 | 1.0 | -6.6 | 0.6 | 0.0 | 0.5 |
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.
More Economy in Brief
