Global| Nov 15 2011U.S. Producer Prices Decline With Energy
by:Tom Moeller
|in:Economy in Brief
Summary
The October producer price index for finished goods fell 0.3% following an unrevised 0.8% September jump. The figure compared to Consensus expectations for a 0.1% slip, according to the Action Economics survey. The increase left the [...]
The October producer price index for finished goods fell 0.3% following an unrevised 0.8% September jump. The figure compared to Consensus expectations for a 0.1% slip, according to the Action Economics survey. The increase left the y/y change at an elevated 6.1%. Core pricing power also was under control last month. Less food & energy, producer prices were unchanged after a 0.2% gain in September. A 0.1% increase had been expected. The latest rise left the twelve-month increase at 2.8%. more-than double last year's rise.
Energy prices fell 1.4% (+13.8% y/y) and reversed the September increase. Strength in gasoline (+26.2% y/y) and home heating oil (+26.1% y/y) prices eased while moderation in electric power (3.0 y/y) and natural gas (-1.4%) costs continued. Earlier strength in food prices eased as they posted a 0.1% uptick (7.5% y/y). Prices for eggs rose by more than one-third y/y while beef & veal prices rose 13.8% y/y. Dairy prices also posted a firm 8.6% y/y gain and fresh fruit prices were up 8.2% as well.
Finished consumer goods prices fell 0.4% (+7.5% y/y) with lower energy costs. Less food & energy, prices ticked up 0.1% (3.4% y/y) though that y/y rise was the strongest since mid-2009. Within the components, men's apparel prices were strong posting a 7.2% y/y increase after being little-changed last year. Household furniture prices rose 2.6% y/y, up from 0.3% last year. Appliance prices rose 1.9% y/y after a 0.6% fall in 2010 and women's apparel prices rose 1.3% after last year's 0.5% dip. Passenger car prices rose 1.8% y/y after last year's 1.4% y/y decline and tobacco prices rose a stable and strong 6.6% y/y. Capital goods prices jumped 1.0% last month and the 2.0% y/y increase built on last year's 0.4% y/y gain.
Intermediate goods prices fell 1.1% (+8.4% y/y) as energy prices dropped 2.6% (+14.9% y/y) and food prices were off 1.5% (+10.7% y/y). Core-intermediate prices fell 0.6% (+6.3% y/y). Crude materials prices dropped 2.5% (+12.6% y/y) as energy prices fell 2.2% (+9.8% y/y) and food prices were off 1.8% (+15.9% y/y). Also down were prices less food & energy. They fell 4.3% and were up a lessened 11.8% y/y. Raw cotton prices were off sharply (+17.1% y/y) and most metals prices also fell, reversing recent strength.
The PPI data are contained in Haver's USECON database with further detail in PPI and PPIR. The expectation figure is available in the AS1REPNA database.
| Producer Price Index (%) | Oct | Sep | Aug | Oct Y/Y | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Finished Goods | -0.3 | 0.8 | 0.0 | 6.1 | 4.2 | -2.5 | 6.4 |
| Less Food & Energy | 0.0 | 0.2 | 0.1 | 2.8 | 1.2 | 2.5 | 3.4 |
| Food | 0.1 | 0.6 | 1.1 | 7.5 | 3.9 | -1.4 | 6.8 |
| Energy | -1.4 | 2.3 | -1.0 | 13.8 | 13.7 | -17.7 | 14.1 |
| Intermediate Goods | -1.1 | 0.6 | -0.5 | 8.4 | 6.4 | -8.4 | 10.3 |
| Less Food & Energy | -0.6 | 0.2 | -0.1 | 6.3 | 4.3 | -4.2 | 7.4 |
| Crude Materials | -2.5 | 2.8 | 0.2 | 12.6 | 21.4 | -30.3 | 21.5 |
| Less Food & Energy | -4.3 | 1.0 | 1.6 | 11.8 | 32.6 | -23.4 | 14.7 |
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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