U.S. Producer Prices Post Surprisingly Modest Gain in March
by:Tom Moeller
|in:Economy in Brief
Summary
- Core goods prices increase minimally.
- Services prices advance steadily.
- Energy prices decline, but food prices rise significantly.
The Producer Price Index for final demand rose 0.2% (2.1% y/y) in March after increasing 0.6% in February, according to the Bureau of Labor Statistics. A 0.3% increase had been expected in the Action Economics Forecast Survey. The PPI excluding food and energy increased 0.2% (2.4% y/y) in line with expectations. Producer prices excluding food, energy & trade services rose 0.2% (2.8% y/y) in March after a 0.3% February rise.
Final demand energy prices declined 1.6% last month (-1.0% y/y) after a 4.1% jump. Gasoline prices fell 3.6% (-1.5% y/y) after increasing 6.7% in February. Electric power prices rose 0.5% (3.9% y/y) following a 0.2% increase. Food prices rose 0.8% (1.0% y/y) after increasing 1.1% in February. The gain reflected a 15.3% rise (26.4% y/y) in fresh & dried vegetable prices as well as a 2.5% increase (-31.9% y/y) in grain prices. Beef & veal costs rose 1.2% (12.4% y/y). Offsetting these increases, fruit & melon costs declined 7.9% (-11.7% y/y), while egg prices dropped 29.8% (-29.7% y/y).
Prices for goods less food & energy edged 0.1% higher (1.4% y/y) in March, following two straight 0.3% increases. Finished consumer goods prices increased 0.1% (1.8% y/y). Core nondurable goods prices held steady (2.4% y/y), while durable consumer goods prices increased 0.3% (1.0% y/y). Capital equipment prices rose 0.4% (2.7% y/y), while government purchased goods prices rose 0.3% (1.8% y/y).
Prices for final demand services increased 0.3% (2.8% y/y), the same as in February. Trade services prices increased 0.3% (0.7% y/y). Prices for final demand transportation and warehousing services rose 0.8% (-0.8% y/y). Services prices less these costs increased 0.2% (4.2% y/y). Prices of travel accommodation services strengthened 2.2% (2.0% y/y). Trade services prices increased 0.3% (0.7% y/y).
Construction costs rose 0.1% last month (-1.1% y/y) after holding steady in February.
Prices for intermediate demand processed goods declined 0.5% (-1.7% y/y) in March after strengthening 1.5% in February. Processed energy goods prices fell 1.5%, while food prices rose 0.6%. The index for intermediate demand unprocessed goods declined 1.9% (-7.1% 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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