Global| Dec 12 2019U.S. Producer Prices Are Unexpectedly Tame; Core Prices Weaken
by:Tom Moeller
|in:Economy in Brief
Summary
The Producer Price Index for final demand was unchanged during November (1.1% y/y) following a 0.4% October rise. A 0.2% gain had been expected in the Action Economics Forecast Survey. Producer prices excluding food & energy declined [...]
The Producer Price Index for final demand was unchanged during November (1.1% y/y) following a 0.4% October rise. A 0.2% gain had been expected in the Action Economics Forecast Survey. Producer prices excluding food & energy declined 0.2% last month (+1.3% y/y) after rising 0.3%. A 0.1% uptick had been expected. The PPI excluding food, beverages and trade services, another measure of underlying price inflation, held steady last month (1.3% y/y) after a 0.1% October gain.
Food prices jumped 1.1% (3.2% y/y) and added to a 1.3% October increase. Higher prices for beef & veal led the increase as they surged 5.4% (4.8% y/y), and dairy product costs improved 1.6% (7.7% y/y). A 4.1% weakening (+4.6% y/y) in fruit & melon prices tempered that increase while bakery product prices rose 0.4% (0.7% y/y).
Final demand energy prices rose 0.6% (-4.0% y/y) as gasoline prices increased 2.3% (-3.7% y/y) and natural gas prices rose 0.5% (1.8% y/y). Offsetting these increases was a 1.1% decline (-15.1% y/y) in the cost of heating oil and the cost of electric power fell 0.6% (+1.5% y/y).
Finished consumer goods prices less food & energy rose 0.2% (1.6% y/y) after a 0.1% uptick. Core nondurable goods prices increased 0.3% (2.0% y/y) and durable product prices improved a minimal 0.1% (0.9% y/y). Passenger car prices rose 0.1% (0.4% y/y) and light truck costs rose 0.5% (-0.6% y/y). Appliance prices held steady (3.3% y/y). Private capital equipment prices rose 0.1% (1.5% y/y).
Services prices for final demand declined 0.3% (+1.4% y/y) and reversed October's increase. Trade services prices fell 0.6% (+1.4% y/y) owing to a 0.7% weakening (+1.2% y/y) in the cost of finished goods trade. Transportation & warehousing prices rose 0.4% (0.2% y/y) but excluding these costs, prices declined 0.1% (+1.7% y/y).
The cost of construction held steady (3.7% y/y) last month following a 0.4% jump. Private construction prices held steady (3.6% y/y) but public construction costs eased 0.1% (3.8% y/y).
Intermediate product prices rose 0.2% (-2.9% y/y) as materials & component prices for manufacturing were off 0.2% (-3.6% y/y).
The PPI data can be found in Haver's USECON database. Further detail can be found in PPI and PPIR. The expectations figures are available in the AS1REPNA database.
| Producer Price Index (SA, %) | Nov | Oct | Sep | Nov Y/Y | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| Final Demand | 0.0 | 0.4 | -0.3 | 1.1 | 2.9 | 2.3 | 0.4 |
| Excluding Food & Energy | -0.2 | 0.3 | -0.3 | 1.3 | 2.6 | 1.9 | 1.2 |
| Excluding Food, Energy & Trade Services | 0.0 | 0.1 | 0.0 | 1.3 | 2.8 | 2.1 | 1.2 |
| Goods | 0.3 | 0.7 | -0.4 | 0.2 | 3.4 | 3.3 | -1.4 |
| Foods | 1.1 | 1.3 | 0.3 | 3.2 | 0.2 | 1.2 | -2.8 |
| Energy | 0.6 | 2.8 | -2.5 | -4.0 | 10.2 | 10.4 | -8.4 |
| Goods Excluding Food & Energy | 0.2 | 0.0 | -0.1 | 0.5 | 2.5 | 2.2 | 0.7 |
| Services | -0.3 | 0.3 | -0.2 | 1.4 | 2.6 | 1.8 | 1.4 |
| Trade Services | -0.6 | 0.8 | -1.0 | 1.4 | 1.8 | 1.4 | 1.3 |
| Construction | 0.0 | 0.4 | 0.1 | 3.7 | 4.0 | 2.2 | 1.1 |
| Intermediate Demand - Processed Goods | 0.2 | 0.4 | -0.4 | -2.9 | 5.3 | 4.7 | -3.1 |
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
