Global| Jun 12 2015U.S. Producer Price Rebound Driven by Energy; Core Nudges Higher
by:Tom Moeller
|in:Economy in Brief
Summary
The overall Final Demand Producer Price Index rebounded 0.5% during May (-1.1% y/y) following an unrevised 0.4% April decline. It was the largest increase since September 2012. A 0.4% rise was expected in the Action Economics Forecast [...]
The overall Final Demand Producer Price Index rebounded 0.5% during May (-1.1% y/y) following an unrevised 0.4% April decline. It was the largest increase since September 2012. A 0.4% rise was expected in the Action Economics Forecast Survey. Prices excluding food & energy matched expectations and gained 0.1% (0.6% y/y) following a 0.2% decline.
Final demand goods prices (35% of the total index) recovered 1.3% (-4.3% y/y). The rise was led by a 5.9% surge in energy prices (-19.5% y/y), a record for the series which dates back to 2009. Gasoline prices jumped 17.0% (-31.3% y/y) and heating oil prices rose 11.5% (-32.1% y/y). The gains were offset by a 1.6% decline in natural gas costs (-17.7% y/y) and a 0.3% slip (+1.3% y/y) in electric power prices. Food prices increased 0.8% (-3.3% y/y), the first increase in six months. It was led by a 42.9% surge in egg prices (1.8% y/y) and a 1.4% rise in dairy product costs (-14.2% y/y). Beef & veal prices rose 0.6% (12.3% y/y) and pasta product prices fell 2.1% (+8.4% y/y).
Final demand goods prices excluding food & energy increased 0.2% (0.5% y/y) led by a 2.7% rise in apparel prices (3.2% y/y). Passenger car prices gained 0.4% (1.3% y/y) and light truck costs rose 0.6% (3.3% y/y). Furniture prices declined 0.2% (-0.4% y/y).
Final demand services costs (63% of the total index) were unchanged (0.6% y/y). Transportation of passengers prices fell 0.4% (-4.3% y/y) but trade services costs rose 0.6% (0.5% y/y).
Final demand construction prices (2.0% of the index) nudged 0.1% higher (1.8% y/y) for the third straight month.
Prices for intermediate demand rebounded 1.0% (-7.0% y/y) following a 1.1% fall.
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, %) | May | Apr | Mar | May Y/Y | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| Final Demand | 0.5 | -0.4 | 0.2 | -1.1 | 1.6 | 1.3 | 1.9 |
| Excluding Food & Energy | 0.1 | -0.2 | 0.2 | 0.6 | 1.7 | 1.5 | 1.9 |
| Goods | 1.3 | -0.7 | 0.3 | -4.3 | 1.3 | 0.8 | 1.7 |
| Foods | 0.8 | -0.9 | -0.8 | -3.3 | 3.2 | 1.7 | 3.0 |
| Energy | 5.9 | -2.9 | 1.5 | -19.5 | -1.0 | -0.8 | 0.2 |
| Goods Excluding Food & Energy | 0.2 | -0.1 | 0.2 | 0.5 | 1.5 | 1.1 | 1.8 |
| Services | 0.0 | -0.1 | 0.1 | 0.6 | 1.8 | 1.6 | 1.9 |
| Construction | 0.1 | 0.1 | 0.1 | 1.8 | 3.0 | 1.8 | 2.9 |
| Intermediate Demand - Processed Goods | 1.0 | -1.1 | -0.1 | -7.0 | 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.
