U.S. Producer Price Index Holds Steady in September; Core Prices Edge Higher
by:Tom Moeller
|in:Economy in Brief
Summary
- Core goods prices increase moderately for third straight month.
- Gain in services prices slows.
- Food prices surge while energy costs continue to decline.
The Producer Price Index for final demand was unchanged (1.8% y/y) during September after rising 0.2% in August and holding steady in July, according to the Bureau of Labor Statistics. The reading compared to expectations for a 0.1% rise in the Action Economics Forecast Survey. Producer prices excluding food, energy & trade services edged 0.1% higher (3.2% y/y) in September after rising 0.2% in August, revised from 0.3%. The PPI excluding food & energy rose an expected 0.2% (2.8% (y/y) after increasing an unrevised 0.3% in August.
Final demand goods prices excluding food & energy rose 0.2% (2.0% y/y) for the third straight month. Core finished consumer goods prices increased 0.2% (2.2% y/y) after rising 0.4%. The increase in core nondurable goods prices moderated to 0.3% in last month (3.0% y/y), half the August increase. Durable consumer goods prices improved 0.1% (1.1% y/y) after rising 0.2% in August. Capital equipment prices rose 0.2% in September (2.6% y/y), the same as in August, after four straight months of 0.1% increase. Government-purchased goods prices increased 0.3% (2.1% y/y) following a 0.1% uptick.
Final demand services prices rose 0.2% (3.1% y/y) in September, after increasing 0.4% in August. Trade services prices rose 0.2% (1.5% y/y) after strengthening 0.7%. Trade of finished goods prices improved 0.3% (0.9% y/y) following a 0.7% increase. Prices for final demand transportation and warehousing services gained 0.3% last month (0.4% y/y) after a 0.9% decline. Services prices less these costs edged 0.1% higher in September (4.1% y/y) following a 0.4% August rise.
Food prices strengthened 1.0% (3.2% y/y) during September after moving up 0.2% in August. Fruit & melon prices rose 8.3% (4.6% y/y) following a 2.9% decline. Grain prices rose 4.8% (-18.4% y/y) and processed fruit & vegetable costs improved 0.6% (2.3% y/y). Beef & veal prices rose 1.5% (-0.1% y/y) after falling 7.6% in August. Fresh egg prices fell 6.2% (+121.3% y/y) following a 55.1% jump. Fresh vegetable costs declined by 2.5% (+7.7% y/y) and reversed the August increase.
Final demand energy prices declined 2.7% last month (-13.8% y/y) after falling 1.0% in August. Gasoline prices weakened 5.6% (-25.7% y/y) after a 0.5% rise in August. Home heating oil prices fell 11.1% (-35.1% y/y) following a 3.0% decline. Electric power prices rose 2.0% (2.5% y/y) in September after falling 1.2% in August. Natural gas prices rose 1.6% (1.3% y/y) and reversed a 1.4% August decline.
Construction costs edged 0.1% higher in September (1.3% y/y) after holding steady in August.
Prices for intermediate demand of processed goods eased 0.8% (-2.7% y/y) in September after slipping 0.2% in August. Processed energy goods prices fell 4.7% following a 0.9% fall, while food prices rose 0.9% after a 0.2% 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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