Global| Dec 11 2018U.S. Producer Prices Edge Higher
by:Tom Moeller
|in:Economy in Brief
Summary
The headline Final Demand Producer Price Index using new methodology ticked 0.1% higher (2.5 % y/y) during November following a 0.6% October increase. No change in the index had been expected in the Action Economics Forecast Survey. [...]
The headline Final Demand Producer Price Index using new methodology ticked 0.1% higher (2.5 % y/y) during November following a 0.6% October increase. No change in the index had been expected in the Action Economics Forecast Survey. Producer prices excluding food & energy rose 0.3% (2.7% y/y) after a 0.5% jump. A 0.2% gain had been anticipated. The PPI excluding food, beverages and trade services is another measure of underlying price inflation. It also rose 0.3% (2.8% y/y) last month following a 0.2% increase.
The PPI using the old methodology fell 0.8% during November (+1.6% y/y) following a 0.8% October decline. Prices excluding food & energy improved 0.3% (2.4% y/y) after holding steady in October.
The moderate gain in producer prices overall reflected a 0.3% increase (2.6% y/y) in services prices. It followed a 0.7% rise. The cost of trade of finished products rose 0.3% (2.2% y/y) after a 1.6% jump in October. Passenger transportation costs surged 2.3% (4.8% y/y) after a 1.1% gain. Transportation & warehousing of goods costs rose 0.8% (6.4% y/y) following a 0.3% rise. Final demand for services prices excluding trade, transportation & warehousing gained edged 0.1% higher (2.6% y/y) after a 0.2% rise.
Goods prices decreased 0.4% (+2.2% y/y) last month after a 0.6% October rise. Goods prices excluding food & energy eased 0.3% (+2.5% y/y) following no change. Durable consumer goods prices held steady (1.7% y/y) after a 0.2% decline. Household furniture prices held steady (2.8% y/y) as the cost of appliances fell 0.6% (+2.3% y/). Core nondurable consumer goods prices strengthened 0.9% (3.4% y/y). Capital equipment prices rose 0.2% (2.0% y/y). Government purchased goods prices less food & energy ticked 0.1% higher (2.3% y/y) for a second straight month.
Energy product prices declined 5.0% (+2.9% y/y) as gasoline prices weakened 14.0% (-1.2% y/y) after a 7.6% rise and home heating oil prices fell 3.1% (+25.3% y/y). Working to offset these declines was a 3.3% surge in natural gas prices (-0.1% y/y). Electric power costs rose moderately m/m (+0.3% y/y).
Food prices strengthened 1.3% last month (0.4% y/y) after a 1.0% increase. The rise was led by a one-third jump (9.7% y/y) in fresh & dry vegetable prices. Egg prices rose 12.2% but still were down 10.9% y/y. Beef & veal prices rose 2.7% (4.1 y/y) but the cost of pork fell 1.1% (-4.8% y/y). Dairy product costs eased 0.8% (-2.1% y/y).
Construction prices improved 0.2% (5.1% y/y) after a 1.9% strengthening.
Prices for intermediate demand processed goods declined 0.7% (+4.3% y/y) and offset a 0.8% rise during October.
The PPI data are contained in Haver's USECON database with further detail in PPI and PPIR. West Texas Intermediate Crude Oil prices are found in the WEEKLY database while the expectations figures are available in the AS1REPNA database.
| Producer Price Index (SA, %, New Methodology) | Nov | Oct | Sep | Nov Y/Y | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Final Demand | 0.1 | 0.6 | 0.2 | 2.5 | 2.3 | 0.4 | -0.9 |
| Excluding Food & Energy | 0.3 | 0.5 | 0.2 | 2.7 | 1.9 | 1.2 | 0.8 |
| Excluding Food, Energy & Trade Services | 0.3 | 0.2 | 0.4 | 2.8 | 2.1 | 1.2 | 0.6 |
| Goods | -0.4 | 0.6 | -0.1 | 2.2 | 3.3 | -1.4 | -4.3 |
| Foods | 1.3 | 1.0 | -0.6 | 0.4 | 1.2 | -2.8 | -2.6 |
| Energy | -5.0 | 2.7 | -0.8 | 2.9 | 10.4 | -8.4 | -20.6 |
| Goods Excluding Food & Energy | -0.3 | 0.0 | 0.2 | 2.5 | 2.2 | 0.7 | 0.4 |
| Services | 0.3 | 0.7 | 0.3 | 2.6 | 1.8 | 1.4 | 0.9 |
| Trade Services | 0.3 | 1.6 | 0.1 | 2.2 | 1.5 | 1.3 | 1.3 |
| Construction | 0.2 | 1.9 | 0.1 | 5.1 | 2.2 | 1.1 | 1.9 |
| Intermediate Demand - Processed Goods | -0.7 | 0.8 | 0.0 | 4.3 | 4.7 | -3.1 | -6.9 |
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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