U.S. Producer Price Inflation Unexpectedly Eases in August; Core Prices Moderate
by:Tom Moeller
|in:Economy in Brief
Summary
- Energy prices fall while food prices edge higher.
- Trade service prices decline after sharp increase.
- Core goods price inflation eases.
The Producer Price Index for final demand eased 0.1% (+2.6% y/y) during August after rising 0.7% in July, revised from 0.9%, and 0.1% in June, revised from no change, according to the Bureau of Labor Statistics (BLS). The Action Economics Forecast Survey expected a 0.3% increase in August. Producer prices excluding food, energy & trade services rose 0.3% last month (2.8% y/y) after an unrevised 0.6% July strengthening and a 0.1% June rise gain. The PPI excluding food & energy eased 0.1% (+2.8% y/y) after rising 0.7% in July. A 0.3% rise had been expected.
Food prices edged 0.1% higher (3.5% y/y) after surging 1.4% in July. Finished consumer food prices fell 0.3% (+3.2% y/y) after surging 1.6% during July. Energy prices for final demand weakened 0.4% (-1.9% y/y) last month, after rising 0.7% in July. Finished consumer energy goods fell 0.3% last month (-1.8% y/y), the same as in July. Gasoline prices fell 0.6% (-12.2% y/y) after falling 2.0%. Natural gas prices weakened 1.4% (+12.7% y/y) following a 0.8% rise.
Final demand services prices eased 0.2% (+2.9% y/y) after strengthening 0.7% in July. Final demand trade services prices fell 1.7% (+2.9% y/y) after increasing 1.0% in July, while the trade of finished goods index declined 1.7% (+2.8% y/y) following a 0.8% gain. Transportation & warehousing prices increased 0.9% (2.4% y/y), the same as in July. Prices for final demand services less trade, transportation, and warehousing increased 0.3% last month (2.9% y/y) after rising 0.6% in July.
The price index for final demand goods less foods & energy increased 0.3% (2.9% y/y) in August following a 0.4% increase. Nondurable consumer goods prices less food & energy rose 0.5% (2.4% y/y) after a 0.2% increase. Durable consumer goods prices rose 0.3% (2.6% y/y), for the third straight month. The private capital equipment price index improved 0.2% (3.3% y/y), after three months of 0.3% increase. Government prices less food & energy edged 0.1% higher (2.8% y/y), also following three straight months of 0.3% increase.
Construction costs eased 0.1% (+1.0% y/y) in August after rising 0.6% in July.
Prices for intermediate demand of processed goods increased 0.4% (2.6% y/y) in August after rising 0.7% in July. Processed foods and feeds prices rose 1.0% after falling 0.3% in both July and June. Processed energy eased 0.1% during August following a 2.1% July increase.
The PPI data are published by the Bureau of Labor Statistics and can be found in Haver’s USECON database. Further detail is contained in PPI and PPIR. The expectations figures are available in the AS1REPNA database.
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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