Global| Oct 14 2020U.S. Producer Prices Rise Moderately in September
by:Tom Moeller
|in:Economy in Brief
Summary
• Core pricing power remains firm. • Goods price increase picks up. • Services prices remain firm. The Producer Price Index for final demand rose 0.4% both m/m and y/y during September following a 0.3% August increase. A 0.2% rise had [...]
• Core pricing power remains firm.
• Goods price increase picks up.
• Services prices remain firm.
The Producer Price Index for final demand rose 0.4% both m/m and y/y during September following a 0.3% August increase. A 0.2% rise had been expected in the Action Economics Forecast Survey. Underlying pricing power remained firm. Producer prices excluding food & energy rose a steady 0.4% (1.2% y/y). A 0.2% rise had been expected. Another measure of underlying pricing power is the PPI excluding food, beverages and trade services. It also rose 0.4% in September (0.7% y/y), following three straight 0.3% increases.
A 1.2% increase (1.0% y/y) in food prices bolstered the change in the PPI overall. Energy prices eased 0.3% (-11.5% y/y) as gasoline prices fell 2.8% (-28.3% y/y). Natural gas prices increased 2.2% (2.7% y/y). Electric power costs strengthened 1.2% (-0.3% y/y).
Final demand goods prices less food & energy rose 0.4% last month (1.3% y/y) following two straight 0.3% increases. Prices for finished consumer goods less food & energy rose 0.1% (1.5% y/y) after two straight 0.3% increases. Core nondurable goods prices held steady (1.7% y/y). Women's apparel prices declined 4.1% y/y, but men's clothing costs rose a steady 0.4% y/y. Durable consumer product prices improved 0.2% (1.0% y/y) as household appliance prices rose 2.1% y/y and furniture prices improved 1.4% y/y.
Private capital equipment prices rose 0.2% last month and the y/y gain has been steady near 1.2% this year.
Services prices for final demand rose 0.4% in September (1.1% y/y) following two months of 0.5% increase. Trade services prices rose a lessened 0.2% (2.6% y/y) after a 1.2% increase. The cost of trade of finished goods improved 0.1% (2.6% y/y) after a 1.3% strengthening while transportation & warehousing services prices rose 0.4% (-4.5% y/y), the strongest change in four months. Excluding these costs, trade services prices improved 0.5% (1.1% y/y) after a 0.3% rise.
The cost of construction weakened 0.2% (+1.6% y/y) for a second straight month.
Intermediate product prices strengthened 1.0% (-1.5% y/y), strong for the fourth straight month.
The PPI data can be found in Haver's USECON database. Further detail can be found in PPI and PPIR. The expectations figures are available in the AS1REPNA database.
| Producer Price Index (SA, %) | Sep | Aug | Jul | Sep Y/Y | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Final Demand | 0.4 | 0.3 | 0.6 | 0.4 | 1.7 | 2.9 | 2.3 |
| Excluding Food & Energy | 0.4 | 0.4 | 0.5 | 1.2 | 2.1 | 2.6 | 1.9 |
| Excluding Food, Energy & Trade Services | 0.4 | 0.3 | 0.3 | 0.7 | 2.0 | 2.9 | 2.1 |
| Goods | 0.4 | 0.1 | 0.8 | -1.0 | 0.4 | 3.4 | 3.4 |
| Foods | 1.2 | -0.4 | -0.5 | 1.0 | 1.8 | 0.2 | 1.2 |
| Energy | -0.3 | -0.1 | 5.3 | -11.5 | -4.4 | 10.1 | 10.6 |
| Goods Excluding Food & Energy | 0.4 | 0.3 | 0.3 | 1.3 | 1.4 | 2.5 | 2.2 |
| Services | 0.4 | 0.5 | 0.5 | 1.1 | 2.2 | 2.6 | 1.8 |
| Trade Services | 0.2 | 1.2 | 0.8 | 2.6 | 2.5 | 1.8 | 1.5 |
| Construction | -0.2 | -0.2 | 0.6 | 1.6 | 4.9 | 4.1 | 2.2 |
| Intermediate Demand - Processed Goods | 1.0 | 0.6 | 1.5 | -1.5 | -1.4 | 5.4 | 4.7 |
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.
More Economy in Brief
