Global| Jul 11 2018U.S. Producer Prices Post Firm Increase
by:Tom Moeller
|in:Economy in Brief
Summary
The headline Final Demand Producer Price Index using new methodology gained 0.3% during June following an unrevised 0.5% strengthening in May. The 3.4% y/y rise was the strongest since November 2011. A 0.2% increase had been expected [...]
The headline Final Demand Producer Price Index using new methodology gained 0.3% during June following an unrevised 0.5% strengthening in May. The 3.4% y/y rise was the strongest since November 2011. A 0.2% increase had been expected in the Action Economics Forecast Survey. The PPI excluding food & energy also improved 0.3% (2.8% y/y), the same as in May. A 0.2% rise had been expected. An updated measure of core producer price inflation (the overall index excluding food, energy and trade services) increased 0.3% (2.7% y/y) following two consecutive 0.1% gains.
Using the old methodology for the Producer Price Index, prices held steady (4.0% y/y) following a 1.0% jump. Excluding food & energy, the index increased 0.2% (2.2% y/y) for the fourth month in the last five.
Final demand goods prices edged 0.1% higher (4.3% y/y) after a 1.0% surge during May. The goods price index excluding food & energy gained a steady 0.3% (2.6% y/y).
Energy prices rose 0.8% (17.2% y/y) following a 4.6% jump. Gasoline prices improved 0.5% (36.5% y/y) after a 9.8% spike. Home heating oil prices strengthened 8.0% (54.9% y/y) following two straight increases of roughly 4.5%. Electric power costs rose 0.4% (2.0% y/y). The 1.9% fall (-2.6% y/y) in natural gas prices was the fifth drop in the last six months. Food prices declined 1.1% (-1.0% y/y) after a 0.1% uptick. Beef & veal prices retreated 2.3% (-7.4% y/y) after a 6.1% strengthening. The cost of fresh fruit rose 3.3% (1.9% y/y) following a 5.0% gain. Dairy product prices eased 0.1% (-1.0% y/y), following a 1.7% jump.
Nondurable consumer goods prices less food & energy slipped 0.1% (3.2% y/y) and reversed the prior month's gain. Men's apparel prices rose 1.2% y/y and home textile costs improved 0.1% y/y. Durable consumer goods prices rose 0.4% (1.8% y/y) for a second straight month. Passenger car prices rose 0.4% (0.1% y/y) but light truck prices increased 0.6% (1.4% y/y) for a second month. Household furniture prices fell 0.2% (NSA, 2.9% y/y) after a 0.2% rise. Private capital equipment prices improved 0.3% (1.5% y/y) for a second straight month. Manufacturing capital equipment costs rose 0.3% (2.3% y/y), while nonmanufacturing capital equipment prices gained a steady 0.2% (1.3% y/y).
Final demand for services prices improved 0.4% (2.8% y/y), the strongest gain since January. Prices less trade, transportation & warehousing increased 0.3% (2.3% y/y) after holding steady in May. Trade services costs strengthened 0.7% after a 0.9% increase. The 3.1% y/y increase compared to 1.8% last year, 1.0% in 2016 and no y/y change in 2015. Transportation and warehousing prices rose 0.5% (5.7% y/y), more than twice last year's annual increase.
Final demand construction prices rose 0.2% after holding steady. The 4.1% y/y increase was up from 3.1% in 2017 and 0.5% in 2016. Private capital investment construction prices rose a steady 0.2% (4.3% y/y). Government costs ticked 0.1% higher (3.9% y/y) after a 0.2% decline.
Prices for intermediate demand goods posted a 0.7% rise (6.8% y/y) following a 1.5% 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) | Jun | May | Apr | Jun Y/Y | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Final Demand | 0.3 | 0.5 | 0.1 | 3.4 | 2.3 | 0.4 | -0.9 |
| Excluding Food & Energy | 0.3 | 0.3 | 0.2 | 2.8 | 1.9 | 1.2 | 0.8 |
| Excluding Food, Energy & Trade Services | 0.3 | 0.1 | 0.1 | 2.7 | 2.1 | 1.2 | 0.6 |
| Goods | 0.1 | 1.0 | 0.0 | 4.3 | 3.3 | -1.4 | -4.3 |
| Foods | -1.1 | 0.1 | -1.1 | -1.0 | 1.2 | -2.8 | -2.6 |
| Energy | 0.8 | 4.6 | 0.1 | 17.2 | 10.4 | -8.4 | -20.6 |
| Goods Excluding Food & Energy | 0.3 | 0.3 | 0.3 | 2.6 | 2.2 | 0.7 | 0.4 |
| Services | 0.4 | 0.3 | 0.1 | 2.8 | 1.8 | 1.4 | 0.9 |
| Trade Services | 0.7 | 0.9 | 0.2 | 3.1 | 1.5 | 1.3 | 1.3 |
| Construction | 0.2 | 0.0 | 1.1 | 4.1 | 2.2 | 1.1 | 1.9 |
| Intermediate Demand - Processed Goods | 0.7 | 1.5 | 0.5 | 6.8 | 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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