Haver Analytics
Haver Analytics
| Feb 16 2024

U.S. Producer Prices Unexpectedly Strengthen in January

  • Increase is strongest in five months.
  • Core goods price gain accelerates.
  • Services prices surge.

The Producer Price Index for final demand rose 0.3% (0.9% y/y) in January after easing 0.1% in December and rising 0.1% in November, according to the Bureau of Labor Statistics. A 0.1% increase had been expected in the Action Economics Forecast Survey. Producer prices excluding food & energy rose 0.5 % (2.0% y/y) in January after easing 0.1% in December. A 0.2% increase had been expected. Another core price measure, producer prices less food, energy & trade services strengthened 0.6% (2.6% y/y) in January after increasing 0.2% in December and 0.1% in November.

Energy prices declined 1.7% (-9.8% y/y), off for the fourth straight month. Gasoline prices were off 3.6% (-13.1% y/y) while home heating oil prices rose 1.8% (-19.5% y/y). Residential natural gas prices increased 1.0% (-17.7% y/y) and the cost of electric power fell 1.2% (+2.5% y/y).

Food prices fell 0.3% (-3.6% y/y) in January after declining 0.7% in December. Fruit & melon prices rose 3.7% (-0.8% y/y) while vegetable prices jumped 9.6% (-19.6% y/y). Egg prices surged 14.6% (-49.5% y/y). Beef & veal prices fell 4.4% (+9.7% y/y) while grain prices were off 5.4% (-32.0% y/y).

The PPI for final demand goods less food & energy rose 0.3% (1.6% y/y) in January after edging 0.1% higher in December. Prices for final demand finished goods less food & energy improved 0.4% (2.4% y/y) in January after holding steady in December. Finished consumer goods prices less food & energy improved 0.2% (2.1% y/y) in January after a 0.1% rise in December, while core nondurable consumer goods prices rose 0.3% (3.0% y/y) and durable consumer goods prices improved 0.2% (0.8% y/y). Prices for private capital equipment increased 0.6% (2.6% y/y) last month while prices for government purchased goods excluding foods & energy rose 0.5% (1.5% y/y).

Prices for final demand services strengthened 0.6% (2.2% y/y) in January after easing 0.1% in December. It was the strongest increase in six months and improved from a 0.1% December decline. Trade services prices gained 0.2% (-0.2% y/y) last month after a 1.0% December decline. Prices of transportation & warehousing fell 0.4% (-4.3% y/y) last month, the third straight monthly decline, while services prices less trade, transportation & warehousing rose 0.8% (4.1% y/y) after rising 0.3% in December.

Final demand construction costs improved 0.3% (-1.0% y/y) in January after a 0.1% December uptick. Construction prices for private capital investment improved 0.3% (-1.1% y/y) and construction prices for government rose 0.4% (-0.7% y/y) last month.

Prices for intermediate demand processed goods fell 0.2% (-3.8% y/y) in January, the fourth straight monthly fall. Intermediate demand processed fuel & lubricant costs weakened 2. 2% (-0.4% y/y).

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.

  • 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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