Global| Oct 12 2017U.S. Producer Prices Strengthen
by:Tom Moeller
|in:Economy in Brief
Summary
The headline Final Demand Producer Price Index using new methodology increased 0.4% during September (2.6% y/y) after a 0.2% August gain. It was the strongest increase since April. A 0.4% rise had been expected in the Action Economics [...]
The headline Final Demand Producer Price Index using new methodology increased 0.4% during September (2.6% y/y) after a 0.2% August gain. It was the strongest increase since April. A 0.4% rise had been expected in the Action Economics Forecast Survey. The PPI excluding food & energy also improved 0.4% last month (2.2% y/y) following a 0.1% rise. A 0.2% gain had been expected.
Using the old methodology for the Producer Price Index, prices increased 0.8% (3.3% y/y) following a 0.5% gain. Excluding food & energy, the index rose 0.2% (1.7% y/y) after a 0.1% uptick.
An updated measure of core producer price inflation is the overall index excluding food, energy and trade services. It gained 0.2% (2.1% y/y) for a second straight month.
Final demand goods prices strengthened 0.7% (3.3% y/y) after a
0.5% increase. It was the strongest rise since January. The price index excluding food & energy
increased 0.3% (2.2% y/y) following a 0.2% rise.
A 3.4% jump in energy prices (10.6% y/y) followed a similar rise in August. Gasoline prices surged 10.9% (24.1% y/y) after a 9.5% rise. Home heating oil prices declined 4.1% (+10.9% y/y) following a 14.1% jump. Natural gas prices eased 0.3% (+3.8% y/y), down for the fourth straight month. Electric power costs fell 0.2% (+2.0% y/y), off for the third consecutive month. Food prices held steady (1.2% y/y) after a 1.3% fall. Beef & veal prices improved 2.2% (-2.8% y/y) after two months of sharp decline. Egg prices strengthened 20.6% (51.1% y/y). Dairy product prices weakened 1.8% (+1.2% y/y) while fresh fruit & melon costs recovered 4.8% (12.8% y/y).
Nondurable consumer goods prices less food & energy ticked 0.1% higher (3.0% y/y) following stability in August. Durable consumer goods prices jumped 0.4% (1.3% y/y) after a 0.3% rise. Household furniture costs eased 0.1% (+1.6% y/y) following two months of firm increase. Passenger car prices rose 0.2% (-0.7% y/y) after declines in three of the prior four months. Light truck prices strengthened 0.8% (2.4% y/y) after a 0.5% rise. Capital equipment prices ticked 0.1% higher (1.0% y/y) for a second straight month.
Final demand for services prices strengthened 0.4% (2.1% y/y), the strongest gain since April. Trade services prices surged 0.8% (2.2% y/y) after one month of stability. Private passenger transportation prices jumped 1.5% (2.9% y/y) after two months of decline.
Final demand construction prices ticked 0.1% higher (3.4% y/y) as prices for private capital investment also gained 0.1% (3.4% y/y). Prices for public investment held steady last month (3.3% y/y).
Prices for intermediate demand for goods strengthened 0.5% (4.3% y/y) following a 0.4% rise.
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.
The minutes to the latest FOMC meeting can be found here.
| Producer Price Index (SA, %, New Methodology) | Sep | Aug | Jul | Sep Y/Y | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| Final Demand | 0.4 | 0.2 | -0.1 | 2.6 | 0.5 | -1.0 | 1.8 |
| Excluding Food & Energy | 0.4 | 0.1 | -0.1 | 2.2 | 1.3 | 0.8 | 1.8 |
| Excluding Food, Energy & Trade Services | 0.2 | 0.2 | 0.0 | 2.1 | 1.2 | 0.6 | 1.2 |
| Goods | 0.7 | 0.5 | -0.1 | 3.3 | -1.5 | -4.9 | 1.4 |
| Foods | 0.0 | -1.3 | 0.0 | 1.2 | -3.2 | -3.1 | 3.7 |
| Energy | 3.4 | 3.3 | -0.3 | 10.6 | -8.2 | -25.6 | -3.2 |
| Goods Excluding Food & Energy | 0.3 | 0.2 | -0.1 | 2.2 | 0.8 | 0.4 | 1.6 |
| Services | 0.4 | 0.1 | -0.2 | 2.1 | 1.5 | 1.0 | 1.9 |
| Trade Services | 0.8 | 0.0 | -0.5 | 2.2 | 1.5 | 1.4 | 2.0 |
| Construction | 0.1 | 0.3 | 1.2 | 3.4 | 1.3 | 3.2 | 1.9 |
| Intermediate Demand - Processed Goods | 0.5 | 0.4 | -0.1 | 4.3 | -5.7 | -14.0 | 1.1 |
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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