EmailEconomic
Last Update: 14-Jun-13 08:49 ET
PPI
Highlights
- Producer prices ended two consecutive months of declines and increased 0.5% in May after declining 0.7% in April. The Briefing.com consensus expected the PPI to increase 0.1%.
- Excluding food and energy, core prices rose 0.1% for a second consecutive month. That was exactly what the consensus expected.
Key Factors
- The increase in producer prices was due almost entirely to higher food and energy costs
- Energy prices, which had declined 2.5% in April and 3.4% in March, rose 1.3%. Most of that gain was the result of a 1.5% increase in gasoline costs.
- Food prices rose 0.6% in May after falling 0.8% in April. A 41.6% increase in egg prices accounted for most of the food price increase.
- Monthly core price growth has not exceeded 0.2% since July 2012, signaling a very stable low-growth trend. Overall, there were no unusual outliers in May. There was nothing in the data that suggested strong pass-through to consumer goods will result in above trend CPI growth.
- Pressures down the manufacturing pipeline remain muted. Core prices of intermediate goods fell 0.4%. That was the second consecutive monthly decline and the largest monthly drop since falling by the same amount in July 2012. Core crude prices dropped 2.3% after falling 2.8% in April. These prices have fallen in four out of the last five months.
Big Picture
- Inflation trends remain low and stable despite stronger-than-expected headline PPI growth.
| Category | MAY | APR | MAR | FEB | JAN |
|---|---|---|---|---|---|
| Finished Goods | 0.5% | -0.7% | -0.6% | 0.7% | 0.2% |
| Core | 0.1% | 0.1% | 0.2% | 0.2% | 0.2% |
| Capital Equipment | 0.1% | 0.1% | 0.1% | 0.1% | 0.1% |
| Consumer Foods | 0.6% | -0.8% | 0.8% | -0.5% | 0.7% |
| Energy | 1.3% | -2.5% | -3.4% | 3.0% | -0.4% |
| Intermediate Materials | -0.1% | -0.6% | -0.9% | 1.3% | 0.0% |
| Core | -0.4% | -0.2% | 0.2% | 0.7% | 0.3% |
| Crude Materials | 2.2% | -0.4% | -2.5% | -0.3% | 0.8% |
| Core | -2.3% | -2.8% | 0.9% | -1.7% | -0.3% |
