U.S. PPI Declines in May; Core Edges Higher
by:Tom Moeller
|in:Economy in Brief
Summary
- Annual gain down sharply from last year’s high.
- Core goods & services prices edge higher.
- Energy & food prices fall sharply.
The Producer Price Index for final demand fell 0.3% (+1.1% y/y) during May after rising an unrevised 0.2% in April. A 0.1% easing had been expected in the Action Economics Forecast Survey. The 1.1% y/y increase was down from the 11.7% high in March of 2022. The PPI for goods excluding food & energy increased 0.1%, the same as in April. A 0.2% rise had been expected. The PPI less food, energy & trade services held steady (2.8% y/y) after increasing 0.1% in April.
Energy prices fell 6.8% (-18.1% y/y) after rising 0.8% in April. Gasoline prices fell 13 .8% (-28.5% y/y) and the cost of home heating oil weakened 13.4% (-43.4% y/y). Natural gas prices declined 1.6% (-7.2% y/y) and electric power prices rose 0.8% (+8.2% y/y).
Food prices fell 1.3% last month (+0.3% y/y), off for the fifth month in the last six. Beef & veal prices rose 0.7% (11.3% y/y) while egg prices declined 53.4% (-64.6% y/y). Dairy product prices weakened 1.0% (-8.6% y/y) but processed fruit & vegetable prices rose 1.3% (14.5% y/y).
Goods prices less food & energy improved 0.1% in May (2.6% y/y) for the second consecutive month. Core consumer goods prices improved 0.3% (4.7% y/y) after holding steady in April. The cost of core nondurable consumer goods increased 0.3% (5.7% y/y) while durable consumer goods prices rose 0.2% (3.2% y/y). Private capital equipment prices rose 0.4% (5.2% y/y). The cost of government-purchased goods less food & energy eased 0.1% (+1.6% y/y).
Services prices rose 0.2% (2.7%) in May following a 0.3% rise. Trade services strengthened 1.0% (2.9% y/y). The final demand price of transportation & warehousing of finished services declined 1.4% (-6.8% y/y), off for the fifth consecutive month. Services prices less these costs improved 0.1% (3.7% y/y) after rising 0.4% in April.
Construction costs rose 0.2% (10.9% y/y) following a 0.3% April decline. Intermediate goods prices fell 1.5% in May (-7.1% y/y) following a 0.5% decline.
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.
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.
More Economy in Brief
