U.S. PPI Increases Modestly in April
by:Tom Moeller
|in:Economy in Brief
Summary
- Annual increase remains at two-year low.
- Core goods & services prices rise.
- Food prices decline; energy costs recover.
The Producer Price Index for final demand rose 0.2% (2.3% y/y) during April after falling 0.4% in March, revised from -0.5%. A 0.3% increase had been expected in the Action Economics Forecast Survey. The PPI excluding food & energy increased an expected 0.2% after holding steady in March. The 3.2% y/y increase was the weakest in two years. A 0.2% rise had been expected. The PPI less food, energy & trade services improved 0.2% (3.4% y/y) after increasing 0.1% in March.
Energy prices increased 0.8% (-8.1% y/y) after falling 6.0% in March. Gasoline prices rose 8.4% (-12.2% y/y) but the cost of home heating oil weakened 5.6% (-31.9% y/y). Natural gas prices declined 5.1% (-0.3% y/y) and electric power prices eased 0.1% (+8.4% y/y).
Food prices fell 0.5% last month (2.5% y/y), off for the fourth month in the last five. Beef & veal prices declined 3.1% (+4.3% y/y) while egg prices declined 35.8% (-24.2% y/y). Dairy product prices eased 0.4% (-6.8% y/y). Fresh fruit prices rose 2.4% (3.2% y/y).
The April rise in the core PPI reflected a 0.2% increase (3.3% y/y) in goods prices less food & energy which followed a 0.2% March rise. Core consumer goods prices improved 0.1% (5.3% y/y) following a 0.2% rise. The cost of core nondurable consumer goods increased 0.2% (6.3% y/y) while durable consumer goods prices eased 0.1% (3.7% y/y). Private capital equipment prices rose 0.1% (5.5% y/y). The cost of government-purchased goods less food & energy held steady (2.8% y/y).
Services prices rose 0.3% (3.0%) in April following a 0.1% slip. Trade services rose 0.5% (2.6% y/y). The final demand price of transportation & warehousing of finished goods declined 1.7% (-2.3% y/y), off for the fourth consecutive month. Services prices less these costs improved 0.4% (3.8% y/y) after rising 0.2% in March.
Construction costs declined 0.3% (11.2% y/y) following a 0.1% March uptick. Intermediate goods prices fell 0.4% in April (-3.2% y/y) following a 0.9% 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.
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