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Producer Prices Eased in March but Were Up 2.3 Percent Year-Over-Year, Highest in Five Years

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The Bureau of Labor Statistics said that producer prices for final demand goods and services edged down 0.1 percent in March, falling for the first time in seven months. For manufacturers, producer prices for final demand goods were also off by 0.1 percent, led lower by reduced energy costs, down 2.9 percent for the month. Still, on a year-over-year basis, final demand energy prices have risen 15.3 percent. At the same time, food prices jumped 0.9 percent in March, its strongest monthly gain since December. Higher costs for cooking oils, eggs, fruits, meats and vegetables were enough to offset lower prices for coffee, dairy products, grains, milled rice and oilseeds. Since March 2016, food prices have inched up 0.3 percent, its first positive year-over-year gain since February 2015.

Excluding food and energy, final demand goods prices for producers increased by 0.4 percent in March. Overall, producer prices for final demand goods and services have risen 2.3 percent since March 2016, its highest year-over-year rate since March 2012. Moreover, it represents a notable pickup in inflationary pressures after being unchanged in August. Meanwhile, core producer prices – which exclude food, energy and trade services – grew 1.75 percent year-over-year in March, up slightly from 1.7 percent in February. That year-over-year pace was the fastest rate since August 2014.

Producer Prices Jumped Significantly in January, Boosted by Higher Energy Costs

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Producer prices jumped 0.6 percent in January, its fastest monthly pace of growth since September 2012. For manufacturers, producer prices for final demand goods accelerated in the latest report, up 1.0 percent and increasing for the fifth straight month. This largely reflected a significant rise in energy costs, up 4.7 percent. In particular, gasoline prices were up 14.5 percent for producers in January, which was also coincidently the year-over-year growth rate.  At the same time, food prices were unchanged in January. Higher costs for dairy products, eggs, grains, pork and shortening and cooking oils were offset by lower prices for beef and veal, chickens, confectionary end products, fish and pasta products, among others. Despite the flat month, food prices have dropped 2.2 percent since January 2016. Read More

Producer Prices for Final Demand Goods Accelerated in December

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Producer prices increased 0.3 percent in December, extending the 0.4 percent gain seen in November. More importantly for manufacturers, producer prices for final demand goods accelerated in the latest report, up 0.7 percent in December. This reflected large monthly jumps in both energy and foods costs, up 2.6 percent and 0.7 percent, respectively. There were higher prices for beef, chicken, dairy products, eggs, fish and shellfish, pork and vegetables for the month. Still, food costs have been on a downward trend over the past two years, down 6.1 percent over the past 24 months. On the other hand, rising natural gas and gasoline prices helped push energy costs higher in December. Since December 2015, final demand energy prices have risen 6.1 percent, but to be fair, they have fallen 23.3 percent from levels seen three years ago.  Excluding food and energy, final demand goods prices for producers increased by 0.3 percent in December. Read More

Higher Food Costs Helped to Push Producer Prices Higher in November

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Producer prices increased 0.4 percent in November, bouncing back from being unchanged in October at growing at its fastest monthly pace since June. Digging into the data, producer prices for final demand goods rose for the third straight month, up 0.2 percent in November. A large jump in food costs, up 0.6 percent, helped to explain much of this boost, with energy prices edging down 0.3 percent. Still, food costs have been on a downward trend over the longer-term, down 2.6 percent over the past 12 months. On the other hand, energy prices have were virtually flat year-over-year, up just 0.2 percent. Excluding food and energy, final demand goods prices for producers increased by 0.2 percent in November. Read More

Producer Prices Were Unchanged in October, but Were Up 0.4 Percent for Final Demand Goods

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Producer prices were unchanged in October, slowing after a rebound in the September data. The flat growth in the headline number stemmed from reduced producer prices for final demand services, down 0.3 percent. In contrast, producer prices for final demand goods increased 0.4 percent in October, extending the 0.7 percent gain seen in September. Higher inflation for goods came largely from a jump in energy costs, up 2.5 percent; whereas, food prices were off by 0.8 percent. Food costs have been on a downward trend over the longer-term, down 3.5 percent over the past 12 months. On the other hand, energy prices have edged up 0.2 percent year-over-year. Read More

Producer Prices Ticked Higher in September, but with Inflation Largely Still in Check for Now

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Producer prices ticked higher in September, bouncing back from softness in the prior two months. The Bureau of Labor Statistics said that producer prices for final demand goods and services rose 0.3 percent in September, the first increase reading in three months. For final demand goods, food and energy prices were both higher, up 0.5 percent and 2.5 percent, respectively, but each were coming back from notable declines in both July and August. The longer-term trend has been negative for both. Food costs have decreased 3.4 percent over the past 12 months, with energy prices off by 2.4 percent year-over-year. Read More

Producer Prices Rose at Fastest Pace in 13 Months in June

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The Bureau of Labor Statistics said that producer prices for final goods and services rose 0.5 percent in June, its fastest monthly pace in 13 months. At the same time, producer prices for final demand goods jumped 0.8 percent in June, extending the 0.7 percent gain seen in May. Food and energy prices were up 0.9 percent and 4.1 percent, respectively, for the month. Regarding energy, the price of West Texas Intermediate crude oil has risen from an average of $30.32 in February to $48.76 in June, its highest point since July 2015. Meanwhile, the rise in food prices in June for goods producers came largely from higher costs for beef, finfish and shellfish, fruits and melons, grains, oilseeds, pork and shortening and cooking oils. Despite the rises this month, food costs have trended lower over the past 12 months, down 2.3 percent, with energy prices off 11.3 percent year-over-year.

Producer prices for final demand goods and services have increased 0.3 percent since June 2015, up from being unchanged year-over-year in May. Core inflation also inched higher for the month, up from 1.2 percent year-over-year in May to 1.3 percent in June. That was the fastest pace for year-over-year core producer price growth since January 2015, and yet, overall pricing pressures remain under control for now. Indeed, core producer prices have remained below the Federal Reserve’s stated goal of 2 percent for 25 straight months. This frees the Federal Open Market Committee to continue pursuing stimulative monetary policies, albeit with a sense that prices are starting to accelerate somewhat.

Producer Prices for Final Goods and Services Picked Up in May

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The Bureau of Labor Statistics said that producer prices for final demand goods and services rose 0.4 percent, extending the 0.2 percent gain seen in April. At the same time, the producer prices for final demand goods jumped 0.7 percent in May, its fastest pace in 12 months. Energy costs rose 2.8 percent in May on higher crude oil prices, which approached $50 per barrel for West Texas Intermediate crude by month’s end, levels not seen since July 2015. At the same time, food costs were up 0.3 percent, offsetting the 0.3 percent decline observed in the prior report. The rise in food prices in May for goods producers came largely from higher costs for chicken, eggs, fresh and dry vegetables, grains, oilseeds and pork. Despite the rises this month, food costs have trended lower over the past 12 months, down 2.7 percent, with energy prices off 14.2 percent year-over-year. Read More

Producer Prices for Final Goods and Services Decreased by 0.1% in March

By | Economy, General, Shopfloor Economics | No Comments

The Bureau of Labor Statistics said that producer prices for final goods and services decreased by 0.1 percent in March, falling for the second straight month. The March decrease, however, stemmed mainly from services. The producer prices for final demand goods rose by 0.2 percent in March, increasing for the first time since June. Energy costs jumped 1.8 percent for the month on higher crude oil prices, which was enough to offset a decline of 0.9 percent on food prices. The decline for food costs in March for producers came largely from sharp drops in prices for eggs and fresh fruits and vegetables, along with lower prices for coffee, pork, poultry and shortening and cooking oils. Food costs have trended lower over the past 12 months, down 2.5 percent, with energy prices off 13.8 percent year-over-year. Read More

Producer Prices Were Unchanged in August

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The Bureau of Labor Statistics said that producer prices for final demand goods and services were unchanged in August. At the same time, producer prices for final demand goods were down 0.6 percent, extending the 0.1 percent decline observed in July. Goods prices were pulled lower by reduced energy costs, which fell 3.3 percent for the month. Indeed, the price of West Texas intermediate crude oil reached an 11-year low of $38.22 per barrel on August 24. Final demand energy costs were 19.6 percent lower in August than 12 months ago. Read More