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Economy in Brief

U.S. Producer Price Gain Moderates in February
by Tom Moeller  March 15, 2022

• Energy & food prices again lead increases.

• Core goods price gain is steady & strong.

• Services prices are unchanged.

The Producer Price Index for Final Demand increased 0.8% (10.0% y/y) during February following a 1.2% January rise. A 0.9% increase had been expected in the Action Economics Forecast Survey. The PPI excluding food and energy rose 0.2% in February (8.4% y/y) after strengthening 1.0% in January. Expectations had been for a 0.6% gain. The PPI less food, energy and trade services also rose 0.2% (6.6% y/y) after increasing 0.8% in January. These series were surveyed before Russia's invasion of Ukraine and date back to 2010.

Another surge in energy prices led last month's increase in the PPI with an 8.2% jump (33.8% y/y) following a 3.7% January rise. Gasoline prices surged 14.8% (60.6% y/y) and added to January's 3.3% increase. Home heating oil prices strengthened 14.4% (77.2% y/y) after a 15.1% rise. Natural gas prices rose 1.7% last month (25.6% y/y) and the cost of electric power increased 1.3% (8.3% y/y).

Food prices increased 1.9% (13.7% y/y) after rising 1.7% in January. Beef & veal prices fell 3.6% (+22.8% y/y) but the cost of dairy products increased 2.9% (16.2% y/y). Vegetable prices rose 17.5% y/y while egg prices strengthened 31.2% y/y.

Final demand for goods prices less foods & energy rose a steady 0.7% (9.6% y/y). Finished consumer goods prices less good & energy rose 0.9% in February (7.4% y/y) following a 0.7% increase. Durable consumer goods prices surged 0.9% last month (8.3% y/y) for the second consecutive month. Core nondurable consumer goods prices also rose 0.9% (6.9% y/y) following a 0.5% increase. Prices for private capital equipment jumped a record 1.0% (8.0% y/y) for the second consecutive month.

Services prices held steady (7.8% y/y) after strengthening 1.0% in January. Trade services prices rose 0.2% (14.4% y/y) following three straight months of strong increase. Services prices less trade, transportation & warehousing fell 0.4% in February (+3.8% y/y) following a 0.8% increase in January.

Construction product prices rose 0.6% (16.6% y/y) after surging 3.6% in January. Construction costs for private capital investment rose 0.7% (18.3% y/y) after 4.0% increase.

Intermediate goods prices jumped 1.6% (23.3% y/y) due to a 7.4% gain (37.9% y/y) in processed fuel costs.

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.

Producer Price Index (SA, %) Feb Jan Dec Feb Y/Y 2021 2020 2019
Final Demand 0.8 1.2 0.4 10.0 7.0 0.2 1.7
   Excluding Food & Energy 0.2 1.0 0.6 8.4 5.6 0.9 2.1
`   Excluding Food, Energy & Trade Services 0.2 0.8 0.4 6.6 5.1 0.7 2.0
   Goods 2.4 1.5 -0.1 14.4 10.5 -1.4 0.4
      Foods 1.9 1.7 -0.2 13.7 8.7 1.3 1.9
      Energy 8.2 3.7 -1.4 33.8 30.2 -12.6 -4.6
    Goods Excluding Food & Energy 0.7 0.7 0.4 9.6 6.5 0.7 1.4
   Services 0.0 1.0 0.7 7.8 5.3 0.9 2.3
      Trade Services 0.2 1.7 1.4 14.4 7.3 1.6 2.4
   Construction 0.6 3.6 0.3 16.6 5.2 2.3 5.0
Intermediate Demand - Processed Goods 1.6 2.0 0.0 23.3 19.4 -2.8 -1.4
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