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producer prices

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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.

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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

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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

Producer Prices Were Higher in June, Extending the Gains Seen 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 in June, extending the 0.5 percent increase seen in May. The gains for the goods sector were even stronger. Indeed, producer prices for final demand goods jumped 1.3 percent and 0.7 percent, respectively, in May and June, with each month spurred higher by rising energy and food costs. On the energy front, energy goods were 5.9 percent and 2.4 percent more expensive in those two months, respectively. This was consistent with the rise in West Texas intermediate crude oil prices, up from an average of $54.45 per barrel in April to $59.82 a barrel in June. At the same time, final demand energy goods costs remain 17.9 percent lower today than 12 months ago. Read More

Monday Economic Report – March 16, 2015

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Here is the summary for this week’s Monday Economic Report: 

Global news dominated the headlines once again last week. The euro sank lower as the European Central Bank began its quantitative easing program, where it plans to purchase 1 trillion euros in government bonds over the next 18 months in an effort to stimulate faster economic growth. As a result, the euro has depreciated by nearly 25 percent over the past 10 months, down from $1.3924 per one euro on May 6 to a close of $1.0483 on Friday. There is also some expectation that it will move to parity soon, a level last seen in November 2002. (For more information on international developments, see the latest Global Manufacturing Economic Update.) 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

Monday Economic Report – January 20, 2015

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Here is the summary for this week’s Monday Economic Report: 

Financial markets around the world continued to react to the softening global economic environment. In particular, foreign exchange markets were rocked by news that Switzerland would no longer support its cap on the franc, where that currency has been seen as a safe haven, particularly against the euro. Almost immediately, the Swiss franc appreciated sharply against the euro and other currencies. For its part, the euro has continued to depreciate against the U.S. dollar, with one euro selling for $1.1581 on Friday. This was down $1.3927 on March 17, the high point of 2014, representing an appreciation of more than 17 percent for the U.S. dollar against the euro. These developments could hurt the ability of manufacturers in the United States to grow exports. Read More