Global| Dec 11 2015U.S. Producer Prices Rebound
by:Tom Moeller
|in:Economy in Brief
Summary
The overall Final Demand Producer Price Index increased 0.3% (-1.1% y/y) during November, following a 0.4% October decline. The Action Economics Forecast Survey expected no change in prices. Prices excluding food & energy gained 0.3% [...]
The overall Final Demand Producer Price Index increased 0.3% (-1.1% y/y) during November, following a 0.4% October decline. The Action Economics Forecast Survey expected no change in prices. Prices excluding food & energy gained 0.3% (0.5% y/y) after two months of 0.3% decrease. A 0.1% rise had been expected.
Final demand goods prices (35% of the total index) eased 0.1% (-1.2% y/y), down for the fifth straight month. The latest decline was led by a 0.6% drop (-19.0% y/y) in energy prices. Gasoline prices fell 1.3% (-33.4% y/y) while home heating oil prices declined 5.2% (-40.4% y/y). Residential natural gas prices were off 3.1% (-11.8% y/y) and residential electric power costs fell 0.3% (+0.1% y/y). Offsetting this decline was a 0.3% gain (-3.9% y/y) in food prices. Egg prices jumped 10.8% (45.7% y/y) and beef & veal costs rose 1.2% (-10.2% y/y). Bakery product prices rose 0.5% (1.4% y/y) but fish & shellfish prices declined 3.5% (-6.3% y/y).
Final demand goods prices excluding food & energy eased 0.1% (-0.1% y/y) after declining 0.3% in October. Core finished consumer goods ticked 0.1% higher (2.4% y/y) after a 0.2% decline. Core consumer nondurables costs rose 0.2% (3.3% y/y) following no change, and consumer durables edged 0.1% higher (1.1% y/y). Private capital equipment costs improved 0.1% (1.0% y/y) while core goods prices for government purchases eased 0.1% for a second month (-0.1% y/y). Prices of goods for export fell 0.5% (-3.6% y/y), down for the fifth straight month.
Final demand services costs (63% of the total index) increased 0.5% (0.5% y/y) after a 0.3% fall. This was led by trade services which rebounded 1.2% (1.0% y/y); trade services represent the margins charged by retail and wholesale dealers and merchants. Prices for transportation of passengers rose 0.4% (-6.2% y/y) after three months of decline. Prices for transportation and warehousing of goods gained 0.4% (-1.9% y/y). Other services, including financial, health care and communications, improved 0.1% (+0.8% y/y).
Final demand construction prices (2.0% of the index) fell 0.3% (+2.1% y/y) after rising 1.0%. Private capital investment costs fell 0.4% (+2.0% y/y).
Prices of processed goods for intermediate demand fell 0.6% (-7.1% y/y), off for the fifth straight month.
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, %) | Nov | Oct | Sep | Nov Y/Y | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| Final Demand | 0.3 | -0.4 | -0.5 | -1.1 | 1.6 | 1.4 | 1.9 |
| Excluding Food & Energy | 0.3 | -0.3 | -0.3 | 0.5 | 1.7 | 1.5 | 1.9 |
| Goods | -0.1 | -0.4 | -1.2 | -4.3 | 1.3 | 0.8 | 1.7 |
| Foods | 0.3 | -0.8 | -0.8 | -3.9 | 3.2 | 1.7 | 3.0 |
| Energy | -0.6 | 0.0 | -5.9 | -19.0 | -0.9 | -0.8 | 0.2 |
| Goods Excluding Food & Energy | -0.1 | -0.3 | 0.0 | -0.1 | 1.5 | 1.1 | 1.8 |
| Services | 0.5 | -0.3 | -0.4 | 0.5 | 1.8 | 1.6 | 1.9 |
| Construction | -0.3 | 1.0 | 0.0 | 2.1 | 2.9 | 1.8 | 2.9 |
| Intermediate Demand - Processed Goods | -0.6 | -0.4 | -1.5 | -7.1 | -2.6 | 0.1 | 0.4 |
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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