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%.
Final demand energy prices increased 4.7% (14.5% y/y) as gasoline prices strengthened 12.9% (32.5% y/y). Home heating oil prices gained 14.5% (52.6% y/y), and natural gas prices improved 2.7% (10.3% y/y). Food prices remained unchanged (-2.2% y/y). Beef & veal prices declined 7.2% (-8.1% y/y) and fruit & melon prices eased 0.1% (-4.7% y/y). Egg prices fell by one-third (-27.5% y/y), but bakery product prices gained 0.2% (0.5% y/y). Pork prices increased 5.4% (7.7% y/y), and dairy product prices rose 1.0% (5.0% y/y).
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.
| 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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