U.S. Producer Price Index Increases Modestly in August
by:Tom Moeller
|in:Economy in Brief
Summary
- Goods prices less food & energy increase moderately.
- Service prices strengthen .
- Food prices edge higher while energy costs decline.
The Producer Price Index for final demand rose 0.2% (1.7% y/y) during August after holding steady in July, revised from 0.1%, according to the Bureau of Labor Statistics. The rise matched expectations in the Action Economics Forecast Survey. Producer prices excluding food, energy & trade services rose 0.3% (3.3% y/y) in August after rising an unrevised 0.3% in July. The PPI excluding food & energy rose 0.3% (2.4% y/y) after falling 0.2% in July, revised from no change. A 0.2% rise had been expected.
Final demand goods prices excluding food & energy rose 0.2% (2.1% y/y) for the second consecutive month. Finished consumer goods prices strengthened 0.4% (2.1% y/y) after rising 0.1%. Core nondurable goods prices surged 0.6% in August (2.8% y/y) after edging 0.1% higher. Durable consumer goods prices improved 0.2% (1.1% y/y) after rising 0.1% in July. Capital equipment prices rose 0.2% in August (2.5% y/y) after four straight months of 0.1% increase, while government-purchased goods prices edged 0.1% higher (2.6% y/y) following a 0.3% rise.
Services prices for final demand strengthened 0.4% (2.6% y/y) in August, after falling 0.3% in July. Trade services prices rose 0.6% (-0.5% y/y) after declining 1.7%. Trade of finished goods prices improved 0.5% (-1.0% y/y) following a 1.8% decline. Prices for final demand transportation and warehousing services eased 0.1% last month (+1.0% y/y) after a 1.0% jump. Services prices less these costs increased 0.3% (4.2% y/y) following a 0.2% rise.
Food prices edged 0.1% higher (2.3% y/y) during August after moving up 0.7% in July. Fresh egg prices surged 55.1% (155.0% y/y). Fresh vegetable costs rose by 2.5% (-4.9% y/y) after a 5.4% decline. Moving lower, fruit & melon prices declined 2.9% (3.2% y/y) following a 10.3% increase. Grain prices fell 1.1% (-26.2% y/y) and processed fruit & vegetable costs eased 0.5% (+3.5% y/y). Beef & veal prices weakened 7.7% (+1.5% y/y) and reversed the prior month’s increase.
Final demand energy prices weakened 0.9% last month (-8.4% y/y) after a 1.8% increase. Gasoline prices rose 0.6% (-16.3% y/y) after a 2.8% strengthening in July. Home heating oil prices fell 2.9% (-20.5% y/y) following an 8.6% increase. Electric power prices weakened 1.1% (+1.3% y/y) after falling 0.7%. Natural gas prices declined 1.8% (-0.6% y/y) after rising 0.8% in July.
Construction costs held steady in August (1.3% y/y) after rising 0.7% in July.
Prices for intermediate demand processed goods eased 0.1% (-1.1% y/y) in August after rising 0.6% in July. Processed energy goods prices fell 0.6%, while food prices eased 0.3%. The index for intermediate demand unprocessed goods declined 3.7% (-4.3% y/y).
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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