U.S. PPI Total & Core Increases Remain Firm in January
by:Tom Moeller
|in:Economy in Brief
Summary
- Energy costs drive overall price increase.
- Core goods price gains are minimal.
- Services price gains are solid.
The Producer Price Index for final demand increased 0.4% (3.5% y/y) last month after increasing 0.5% in December, revised from 0.2%, following a 0.2% rise in November, revised from 0.4% according to the Bureau of Labor Statistics (BLS). The January gain compared to a 0.3% rise expected in the Action Economics Forecast Survey. Producer prices excluding food, energy & trade services rose 0.3% (3.4% y/y) after rising 0.4% in December, revised from 0.1%. The PPI excluding food & energy rose an expected 0.3% (3.6% y/y) after increasing 0.4% in December, revised from unchanged, and 0.1% in November, revised from 0.2%.
Energy prices increased 1.7% (0.0% y/y) during January, after rising 2.2% December. Gasoline costs rose 0.2% (-0.3% y/y) while home heating oil prices rose 10.2% (-2.5% y/y). Electric power prices fell 0.8% (+0.4% y/y) and natural gas costs jumped 3.2% (4.9% y/y). Diesel fuel prices surged 10.4% (-6.6% y/y).
Final demand food prices rose 1.1% (5.5% y/y) in January, following a 0.4% December gain. Prices for fresh and dry vegetables declined 22.3% (-14.0 y/y), while egg price surged 44.0% (186.4% y/y). Beef & veal prices increased 5.7% (14.8% y/y) while dairy product prices rose 0.4% (6.9% y/y).
Final demand goods prices excluding food & energy edged 0.1% higher (2.0% y/y) in January, the same as in December. Core finished consumer goods prices declined 0.3% (+1.9% y/y) after a rise of 0.1% in December. Core nondurable goods prices declined 0.5% (+2.2% y/y) last month after a 0.1% uptick in December. Durable consumer goods prices held steady (1.5% y/y) in January following a rise of 0.2% in December. Capital equipment prices rose 0.3% (2.6% y/y) last month following a 0.2% December gain. Core government-purchased goods prices rose 0.7% (2.6% y/y) in January, after a 0.3% December increase.
Final demand services prices rose 0.3% (4.1% y/y) last month after rising 0.5% in December. Trade services prices improved 0.1% (4.2% y/y) last month following a 0.7% gain. Trade of finished goods prices improved 0.1% (4.2% y/y), after rising 0.7% (2.8% y/y) in December. Prices for final demand transportation and warehousing services rose 0.6% (3.6% y/y) in January, after strengthening 2.5% in December. Services prices less these costs rose 0.4% (4.1% y/y) last month, after a rise of 0.3% in December.
Construction costs rose 0.4% (1.8% y/y) in January, after increasing 0.2% during December.
Prices for intermediate demand of processed goods rose 1.0% both m/m and y/y in January after rising 0.2% in December. Processed energy goods prices rose 3.5% last month after increasing 1.0% in December, while food prices rose 0.8% following a 0.4% advance in December.
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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