Economics news, commentary, research: Producer Price Index

Monday, March 25, 2013

Producer Price Index

http://bloomberg.econoday.com/byshoweventfull.asp?fid=456114&cust=bloomberg-us&year=2013&lid=0&prev=/byweek.asp#top

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Producer Price Index

Released On 3/14/2013 8:30:00 AM For Feb, 2013

	Prior	Consensus	Consensus Range	Actual
PPI - M/M change	0.2 %	0.6 %	0.2 % to 1.5 %	0.7 %
PPI -Yr/Yr change	1.4 %			1.8 %
PPI less food & energy - M/M change	0.2 %	0.2 %	0.1 % to 0.2 %	0.2 %
PPI less food & energy - Yr/Yr change	1.8 %			1.7 %

Highlights
Energy inflation was back in February, boosting the headline rate for the PPI. The core, however, remained moderate. The February producer price index increased a strong 0.7 percent, following a rebound of 0.2 percent in January. The February figure posted higher than market expectations for a 0.6 percent increase. The core rate, which excludes both food and energy, rose 0.2 percent-matching the prior month's pace. The consensus projected a 0.2 percent increase.

Food prices declined 0.5 percent after jumping 0.7 percent in January. Energy costs in February accelerated to a 3.0 percent boost, following a 0.4 percent decline the prior month. Gasoline spiked 7.2 percent, following a monthly decrease of 2.1 percent in January.

Within the core, about twenty percent of the February increase can be traced to prices for pharmaceutical preparations, which moved up 0.2 percent. An advance in the index for plastic products also contributed to higher prices for finished goods less foods and energy. Passenger car prices gained 0.3 percent while light trucks rose 0.1 percent.

For the overall PPI, the year-ago rate in posted at 1.8 percent, compared to 1.4 percent in January (seasonally adjusted). The core rate was up 1.7 percent versus 1.8 percent in January. On a not seasonally adjusted basis for February, the year-ago headline PPI was up 1.7 percent, while the core was up 1.7 percent.

Market Consensus before announcement
The producer price index rebounded 0.2 percent, following a dip of 0.3 percent the prior month. The core rate, which excludes both food and energy, gained 0.2 percent, following a rise of 0.1 percent in December. Food inflation increased 0.7 after dropping 0.8 percent in December. Energy costs in January slipped another 0.4 percent, following a decline of 0.6 percent in December. Gasoline declined 2.1 percent after decreasing 1.8 percent in December. Within the core, most of the January advance can be traced to a 2.5 percent rise in the index for pharmaceutical preparations. While crude oil prices dipped in early March, the February average was up and suggests upward pressure on the headline number for the PPI.

Definition
The Producer Price Index (PPI) of the Bureau of Labor Statistics (BLS) is a family of indexes that measure the average change over time in the prices received by domestic producers of goods and services. PPIs measure price change from the perspective of the seller. The headline PPI (for finished goods) is a measure of the average price level for a fixed basket of capital and consumer goods for prices received by producers. Why Investors Care

It is always a good idea to look at more than a few months of data to get a sense of changes in established trends. Monthly changes in the PPI are mainly volatile because of sharp fluctuations in food and energy prices. The core PPI eliminates the sharper fluctuations.
Data Source: Haver Analytics

Yearly changes tend to smooth out more severe monthly fluctuations and give a better idea of the underlying rate of inflation. Even with the smoother trend, note that the core PPI does not fluctuate as much as the total PPI.
Data Source: Haver Analytics

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2013 Release Schedule

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