Global| Apr 13 2016U.S. Producer Prices Ease; Energy Prices Increase
by:Tom Moeller
|in:Economy in Brief
Summary
The headline Final Demand Producer Price Index dipped 0.1% (-0.1% y/y) in March after an unrevised 0.2% February decline. The easing compared to a 0.3% increase expected in the Action Economics Forecast Survey. A 0.9% decline (-2.5% [...]
The headline Final Demand Producer Price Index dipped 0.1% (-0.1% y/y) in March after an unrevised 0.2% February decline. The easing compared to a 0.3% increase expected in the Action Economics Forecast Survey. A 0.9% decline (-2.5% y/y) in food prices offset a 1.8% increase (-13.8% y/y) in energy prices. Excluding food & energy, the PPI edged 0.1% higher (1.0% y/y) for a second straight month, as expected.
The decline in food prices reflected a 27.4% drop in egg prices (-30.8% y/y) as well as a 0.4% fall in dairy product prices (-1.5% y/y). These declines were offset by a 0.5% rise (-16.5% y/y) in beef & veal costs as well as a 1.7% jump (+5.1% y/y) in fish & shellfish prices. Pasta product prices gained 0.3% (-2.0% y/y). On the energy price front, the jump in prices was driven by a 7.1% rebound (-27.2% y/y) in gasoline prices as well as a 10.5% surge (-20.7% y/y) in home heating oil prices. Natural gas prices fell 1.5% (-7.5% y/y), and electric power costs eased 0.2% (-0.8% y/y).
A 0.1% improvement (0.3% y/y) in core producer goods prices for final demand was the third increase in the last four months. It reflected the emerging improvement in factory sector activity. Durable consumer goods prices were unchanged (0.4% y/y) and core nondurable goods costs edged 0.1% higher (3.7% y/y), though that was the weakest monthly increase since a decline last October. Capital equipment prices were unchanged (0.4% y/y) for the third consecutive month.
The service price decline of 0.2% (+1.2% y/y) followed no change in prices in February. It reflected a 1.7% drop (+3.9% y/y) in capital equipment trade which reversed the prior month's increase. Personal consumption trade prices remained unchanged 0.6% y/y) while government goods trade prices fell 1.8% (+0.1% y/y). Passenger transportation prices increased 0.7% (-3.6% y/y) following a 0.9% decline. Prices for transportation & warehousing of goods declined 0.6% (-1.8% y/y), off for the fourth straight month. Service prices excluding each of these categories eased 0.1% (+1.7% y/y) following three months of strength.
Construction costs for final demand edged 0.1% higher (1.1% y/y) following four consecutive months of decline.
Prices for intermediate processed goods declined 0.2% (-5.5% y/y). They have been falling since August 2014.
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, %) | Mar | Feb | Jan | Mar Y/Y | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Final Demand | -0.1 | -0.2 | 0.1 | -0.1 | -0.9 | 1.6 | 1.4 |
| Excluding Food & Energy | 0.1 | 0.1 | 0.0 | 1.0 | 0.8 | 1.7 | 1.5 |
| Excluding Food, Energy & Trade Services | 0.0 | 0.1 | 0.2 | 0.9 | 0.6 | 1.2 | -- |
| Goods | 0.2 | -0.6 | -0.7 | -2.6 | -4.3 | 1.3 | 0.8 |
| Foods | -0.9 | -0.3 | 1.0 | -2.5 | -2.6 | 3.2 | 1.7 |
| Energy | 1.8 | -3.4 | -5.0 | -13.8 | -20.6 | -0.9 | -0.8 |
| Goods Excluding Food & Energy | 0.1 | 0.1 | 0.0 | 0.3 | 0.4 | 1.5 | 1.1 |
| Services | -0.2 | 0.0 | 0.5 | 1.2 | 0.9 | 1.8 | 1.6 |
| Construction | 0.1 | -0.1 | -0.4 | 1.1 | 1.9 | 2.9 | 1.8 |
| Intermediate Demand - Processed Goods | -0.2 | -0.7 | -1.2 | -5.5 | -6.9 | 0.6 | 0.0 |
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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