Global| Feb 14 2017U.S. Producer Prices Strengthen Broadly
by:Tom Moeller
|in:Economy in Brief
Summary
The headline Final Demand Producer Price Index increased 0.6% during January (1.6% y/y) after a 0.2% December gain, revised from 0.3%. The rise was the largest since September 2012, and exceeded expectations for a 0.3% increase in the [...]
The headline Final Demand Producer Price Index increased 0.6% during January (1.6% y/y) after a 0.2% December gain, revised from 0.3%. The rise was the largest since September 2012, and exceeded expectations for a 0.3% increase in the Action Economics Forecast Survey. The PPI excluding food and energy rose 0.4% (1.2% y/y) following a 0.1% uptick, revised from 0.2%. It was the largest gain since June 2015. A 0.2% rise had been expected.
Prices of trade services jumped 0.9% (0.1% y/y) following no change during December. An updated measure of "core" PPI inflation, final demand prices excluding food, energy, and trade services prices, increased 0.2% (1.6% y/y) following a 0.1% December rise.Final demand goods prices jumped 1.0% (3.1% y/y), the strongest rise since May 2015. It reflected a 4.7% increase (14.0% y/y) in energy prices which followed 1.8% gain. This rise was accompanied by no change (-2.2 % y/y) in food prices, which followed two months of 0.5% increase.
Nondurable goods prices excluding food & energy
strengthened 0.5% (3.3% y/y) following a 0.1% rise.
Finished durable
goods prices eased 0.1% (+1.1% y/y) following a 0.1% dip. Private capital
goods prices gained 0.1% (0.9% y/y) after improving 0.2%.
Prices of final demand for services gained 0.3% (0.8%
y/y) following a 0.1% uptick. Trade services prices increased 0.9% (0.1% y/y)
following no change in December. Prices for transportation of private passengers
recovered 3.6% (2.3% y/y) after a 1.7% fall, while transportation & warehousing costs
increased 0.4% (0.7% y/y). Final demand construction costs increased 0.3% (1.3% y/y) following a 0.1%
dip. Prices of processed goods for intermediate demand surged 1.1%
(3.8% y/y), the strongest rise since February 2013. 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. Semiannual Monetary Policy Report to the Congress by
Fed Chair Janet L. Yellen is available here https://www.federalreserve.gov/newsevents/testimony/yellen20170214a.htm
Producer Price Index (SA, %)
Jan
Dec
Nov
Jan Y/Y
2016
2015
2014
Final Demand
0.6
0.2
0.5
1.6
0.4
-0.9
1.6
Excluding Food & Energy
0.4
0.1
0.5
1.2
1.2
0.8
1.7
Excluding Food, Energy &
Trade Services
0.2
0.1
0.2
1.6
1.2
0.6
1.2
Goods
1.0
0.6
0.2
3.1
-1.4
-4.3
1.3
Foods
0.0
0.5
0.5
-2.2
2.7
-2.6
3.2
Energy
4.7
1.8
0.1
14.0
-8.4
-20.6
-0.9
Goods
Excluding Food & Energy
0.4
0.3
0.2
2.1
0.8
0.4
1.5
Services
0.3
0.1
0.5
0.8
1.3
0.9
1.8
Trade
Services
0.9
0.0
1.3
0.1
1.2
1.3
1.9
Construction
0.3
-0.1
0.1
1.3
1.1
1.9
2.9
Intermediate Demand - Processed Goods
1.1
0.4
0.3
3.8
-3.0
-6.9
0.6
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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