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

By | Economy, Shopfloor Economics | No Comments

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

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

By | Economy, Shopfloor Economics | No Comments

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

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Producer Prices Rose at Fastest Pace in 13 Months in June

By | Economy, Shopfloor Economics | No Comments

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.

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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

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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

Producer Prices Were Higher in July, Slowing from the Rate Seen in June

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The Bureau of Labor Statistics said that producer prices for final demand goods and services rose 0.2 percent in July, slowing from the 0.4 percent growth rate seen in June. At the same time, producer prices for final demand goods declined 0.1 percent, with reduced energy and food costs pulling the index lower. It was the first decrease in the goods index since April. Looking specifically at energy costs, final demand energy goods fell 0.6 percent for the month, ending two months of significant gains. Indeed, the average price of West Texas intermediate crude oil fell from $59.82 per gallon in June to $50.90 in July. (It has fallen further since then, closing at $42.23 a gallon on August 13 – its lowest level since March 2009.) To be fair, final demand energy goods costs were 17.7 percent lower in July than 12 months ago. Read More

Increased Food and Energy Costs Pushed Producer Prices Higher in May

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The Bureau of Labor Statistics said that producer prices for final demand goods and services increased 0.5 percent in May, rebounding from the 0.4 percent decline of April. Moreover, producer prices for final demand goods jumped 1.3 percent, led by increased costs for foods (up 0.8 percent) and energy (up 5.9 percent). Indeed, the price of West Texas intermediate crude oil rose from an average of $54.27 per barrel in April to $59.27 in May, helping to explain the additional cost for energy. Still, even with the increase in May, energy costs have declined 19.3 percent year-over-year, continuing to reflect the sharp decline in crude oil prices from earlier heights. Read More

Producer Prices for Final Demand Goods Have Fallen for 8 Straight Months

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The Bureau of Labor Statistics said that producer prices for final demand goods and services surprisingly fell 0.5 percent in February. The consensus expectation had been for an increase of 0.3 percent, particularly as petroleum prices have stopped falling. Indeed, final demand energy goods prices were unchanged as a whole in February, the first non-negative number since June. Yet, lower food prices helped to reduce producer prices for final demand goods for the eighth straight month, down 0.4 percent. In particular, there were lower prices reported for dairy products, fruits and vegetables, grains, meats and shellfish – precisely the areas that have seen significant increases over much of the past year. Food prices rose 4.3 percent in 2014, but declines in the first two months of 2015 have reduced these costs by 2.6 percent. Read More

Producer Prices Fell 0.8 Percent in January

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The Bureau of Labor Statistics said that producer prices for final demand goods and services declined 0.8 percent in January, falling for the fifth time in the past six months. Looking just at final demand goods, producer prices plummeted in January, down 2.1 percent and off for the seventh consecutive month. Reduced energy prices have contributed to the sharp decline in producer prices, with final demand energy goods down 10.3 percent in January alone. Indeed, West Texas intermediate crude sold for an average of $47.22 a barrel in January, down from the monthly average of $59.29 in December. Read More