Global| Jun 13 2018U.S. Producer Prices Increase With Strengthening Energy Prices
by:Tom Moeller
|in:Economy in Brief
Summary
The headline Final Demand Producer Price Index using new methodology jumped 0.5% (3.1% y/y) during May following an unrevised 0.1% uptick in April. A 0.3% increase had been expected in the Action Economics Forecast Survey. The PPI [...]
The headline Final Demand Producer Price Index using new methodology jumped 0.5% (3.1% y/y) during May following an unrevised 0.1% uptick in April. A 0.3% increase had been expected in the Action Economics Forecast Survey. The PPI excluding food & energy improved 0.3% (2.4% y/y) after a 0.2% gain. A 0.2% rise had been expected. An updated measure of core producer price inflation (the overall index excluding food, energy and trade services) ticked 0.1% higher (2.6% y/y) for the second straight month.
Using the old methodology for the Producer Price Index, prices increased 1.0% (4.1% y/y) following a 0.1% dip. Excluding food & energy, the index increased 0.2% (2.2% y/y) after a 0.3% rise.
Final demand goods prices strengthened 1.0% (4.4% y/y) after remaining unchanged during April. The goods price index excluding food & energy gained a 0.3% (2.5% y/y) for the third straight month.
Energy prices rose 4.6% (16.5% y/y) following a 0.1% gain. Gasoline prices surged 9.8% (36.6% y/y) after falling for two straight months. Home heating oil prices rose 4.5% (42.3% y/y), about as they did during the prior month. Electric power costs rose 0.8% ( 1.5% y/y). To the downside were natural gas prices which fell 1.5% (-0.9% y/y). Food prices edged up 0.1% (0.5 y/y) last month after a 1.1% drop. Beef & veal prices surged 6.1% (-0.5% y/y) and recovered all of the April decline. Fresh fruit costs jumped 5.0% (-1.9% y/y). Dairy product prices increased 1.7% (0.2% y/y).
Nondurable consumer goods prices less food & energy ticked 0.1% higher (3.6% y/y) after a 0.6% rise. Durable consumer goods prices rose 0.4% (1.6% y/y) following a 0.1% uptick. Passenger car prices eased 0.1% (-0.2% y/y) but light truck prices increased 0.6% (1.1% y/y). Private capital equipment prices improved 0.3% (2.0% y/y) after a 0.1% gain. Manufacturing capital equipment costs rose 0.5% (2.0% y/y), while nonmanufacturing capital equipment prices improved 0.2% (1.1% y/y).
Final demand for services prices improved 0.3% (2.4% y/y) after a 0.1% rise. Prices less trade, transportation & warehousing held steady (2.3% y/y) after a 0.1% dip. Trade services costs strengthened 0.9% (1.9% y/y). Transportation and warehousing prices rose 0.7% (5.8% y/y).
Final demand construction prices held steady (4.1% y/y) after a 1.1% jump. Private capital investment construction prices rose 0.2% (4.2% y/y) after a 1.0% jump. Government costs eased 0.2% (+3.9% y/y) after a 1.2% strengthening.
Prices for intermediate demand goods posted a strong 1.5% rise (6.3% y/y) following a 0.5% increase.
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) | May | Apr | Mar | May Y/Y | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Final Demand | 0.5 | 0.1 | 0.3 | 3.1 | 2.3 | 0.4 | -0.9 |
| Excluding Food & Energy | 0.3 | 0.2 | 0.3 | 2.4 | 1.9 | 1.2 | 0.8 |
| Excluding Food, Energy & Trade Services | 0.1 | 0.1 | 0.4 | 2.6 | 2.1 | 1.2 | 0.6 |
| Goods | 1.0 | 0.0 | 0.3 | 4.4 | 3.3 | -1.4 | -4.3 |
| Foods | 0.1 | -1.1 | 2.2 | 0.5 | 1.2 | -2.8 | -2.6 |
| Energy | 4.6 | 0.1 | -2.1 | 16.5 | 10.4 | -8.4 | -20.6 |
| Goods Excluding Food & Energy | 0.3 | 0.3 | 0.3 | 2.5 | 2.2 | 0.7 | 0.4 |
| Services | 0.3 | 0.1 | 0.3 | 2.4 | 1.8 | 1.4 | 0.9 |
| Trade Services | 0.9 | 0.2 | 0.2 | 1.9 | 1.5 | 1.3 | 1.3 |
| Construction | 0.0 | 1.1 | 0.2 | 4.1 | 2.2 | 1.1 | 1.9 |
| Intermediate Demand - Processed Goods | 1.5 | 0.5 | -0.3 | 6.3 | 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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