U.S. Producer Prices Hold Steady in November
by:Tom Moeller
|in:Economy in Brief
Summary
- Unchanged reading reflects lower energy prices.
- Core consumer goods prices rise.
- Services prices are unchanged for a second straight month.
The Producer Price Index for final demand remained unchanged (+0.9% y/y) last month following a 0.4% October decline, revised from -0.5%. No change in prices had been expected by the Action Economics Forecast Survey. The PPI excluding food and energy prices held steady (2.0% y/y) in November following stability (unrevised) in October. A 0.2% increase had been expected. Another core price measure, the PPI excluding food, energy and trade services prices, rose 0.1% (2.5% y/y) for the second consecutive month.
A 1.2% decline (-8.4% y/y) in energy prices held back the gain in the PPI last month, following a 6.7% October drop. Gasoline prices fell 4.1% (-12.8% y/y). Diesel fuel prices, however, rose by 2.6%. Home heating oil prices declined 7.9% (-22.4% y/y) while the price of residential natural gas rose 3.0% (-8.2% y/y). The price of residential electric power rose 0.5% (4.9% y/y).
Food prices increased 0.6% last month (-4.9% y/y) after a 0.1% October dip. Dairy product prices fell 0.4% (-6.2% y/y) and grain prices declined 3.3% (-32.0% y/y). Beef & veal prices rose 1.8% (25.6% y/y) for a second straight month while fish prices moved up 0.6% (-6.4% y/y). Pork product prices fell 0.7% (-6.7% y/y).
The 0.2% rise in the core goods PPI reflected a 0.3% increase (2.7% y/y) in core finished consumer goods prices. Core nondurable consumer goods prices rose 0.2% (3.4% y/y) while the cost of durable consumer goods increased 0.4% (1.6% y/y). Private capital equipment costs rose 0.2% (3.1% y/y) while government equipment prices held steady (0.7% y/y).
Prices for final demand services were unchanged in November (2.1% y/y) as in October. The index for final demand transportation and warehousing services fell 0.5% (-4.0% y/y). Prices for final demand services excluding trade, transportation, and warehousing edged 0.1% higher (3.7% y/y).
Construction costs fell 0.2% last month (+0.4% y/y) after falling 0.4% in October. Intermediate goods prices held steady (-4.1% y/y) following a 1.0% decline which reflected lower prices for processed fuels & lubricants.
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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