US Producer Prices Decline 0.6% in February, 12-Month Wholesale Inflation Rises 4.4%
US producer prices declined more than expected in February, according to the latest figures provided in a government report released Wednesday.
The Labor Department’s Producer Price Index (PPI) dropped 0.6 in February — the biggest fall since July, and after soaring 1.4% in January. The PPI measures inflationary pressures before they reach the consumer or, more technically, the wholesale price of goods leaving the factory gate. Many analysts were forecasting a monthly decrease ranging from 0.2% to 0.3%.
"Disinflation is going to be with us for a while," Julia Coronado, a senior U.S. economist at BNP Paribas in New York, said in a Bloomberg Radio interview. "That’s going to allow the Fed to stay on hold for a lot longer than the market is expecting."
Deflation is a persistent decrease in general prices, or the opposite of inflation. Falling prices may seem like good news for consumers, but only to a certain point. If prices mark sustained deflationary levels that strike below the cost to produce goods and services, further economic turmoil can ensue with production cuts, payroll reductions and deepening unemployment. Read more
US Producer Prices Surge 1.4% in January, Annual Wholesale Inflation Rises to 4.6%
Producer prices in the U.S. jumped more than expected in January and annual wholesale inflation climbed the most since October 2008, the government reported on Thursday.
The Labor Department’s Producer Price Index (PPI), which measures inflation pressures before they reach the consumer, soared 1.4% in January after a 0.4% increase in December. Forecasts for the month ranged from 0.7% to 0.9%.
Driving prices higher were increased energy and good costs, with respective gains of 5.1% and 1.7%. The same readings in December came in at 0.7% and 0.6%. The biggest contributors to wholesale energy prices were a 11.5% advance in gasoline and 16.2% rise in home heating oil — the latter helped by colder than normal weather. Food prices were up 0.4% compared to 1.3% in December. Read more
US Producer Prices Jump 1.8% in November, Annual Wholesale Inflation Hits 2.4%
Producer prices in the U.S. increased much more than expected in November, as did the annual wholesale inflation reading, according to a government report on Tuesday.
The Labor Department’s Producer Price Index (PPI), which measures inflation pressures before they reach the consumer, soared 1.8% in November — the biggest gain in three months. Expectations generally ranged from between 0.8% and 1.0%. October’s PPI advanced 0.3%. (Prices declined 0.6% in September after a 1.7% increase in August.)
"The numbers were a bit higher than expected, and investors are concerned a bit, but the market is not moving too much on it because there is a low possibility that these little tickles of inflation would lead to changes in rates," Keith Springer, president of Capital Financial Advisory Services in Sacramento, California, said on Reuters.
Energy prices at the wholesale level surged 6.9% in November as compared to a 1.6% increase in October and a 2.4% decline in September. Gasoline was a big part of the increase, soaring 14.2% in the month. Energy as a whole accounted for about 75% of November’s PPI increase. Read more
U.S. Producer Prices Rise in October, but Core Wholesale Inflation Falls
U.S. producer prices in October increased 0.3% as a result of higher food and energy prices, but core wholesale inflation, which excludes the volatile food and energy costs, declined 0.6%, according to a government reported released Tuesday.
The Labor Department’s Producer Price Index, which measures inflation pressures before they reach the consumer, has increased twice during the past four months. Prices declined 0.6% in September following a 1.7% increase in August.
Energy prices at the wholesale level increased 1.6% in October after a decline of 2.4% in September. Gasoline costs climbed 1.9%, accounting for almost half of the increase. Food prices also rose 1.6%, following a 0.1% decline in the month prior. Fresh and dry vegetables prices jumped 24.2% and accounted for about half of the increase.
"There is little doubt that over the last few months, inflation has picked up in the economy," wrote Dan Greenhaus, an economist for Miller Tabak & Co. who was cited on MarketWatch. "But in a general sense, the overall slack in the economy and weakness in the labor market will work to hold down broader inflation measurements over the coming quarters."
Compared with a year earlier, producer prices were 1.9% lower in October. Read more
US wholesale inflation drops as producer prices decline 0.6% in September
Sharply lower energy costs helped pull US wholesale inflation down as producer prices declined 0.6% in September and 4.8% on a year-over-year basis, the government reported Tuesday.
The latest Labor Department’s Producer Price Index number, which measures prices at the factory door and inflation pressures before they reach the consumer, follows 1.7% increase in August.
"Inflation is not an immediate concern," Ryan Sweet, an economist at Moody’s Economy.com in West Chester, Pennsylvania, was quoted on Bloomberg. "We’re probably going to see core inflation continue to soften over the next couple of months" and "this will likely keep the Fed on the sidelines for the foreseeable future."
Both food and energy prices at the wholesale level dropped in September, falling 0.1% and 2.4%, respectively. Read more
US wholesale inflation higher as August producer prices rise 1.7%
US wholesale inflation ticked higher in August as producer prices rose 1.7% during the month, according to newly released data from the Labor Department. The monthly increase contrasts against a 0.9% decline in July, and is sharply above — more than double — what many analysts were expecting.
"We are concerned about the outlook for inflation later in 2010 and this report suggests that inflation pressures may be beginning to stir in manufacturing," John Ryding and Conrad DeQuadros of RDQ Economics was quoted on MarketWatch.com.
The Labor Department’s Producer Price Index data, which measures prices at the factory door and inflation pressures before they reach the consumer, showed the bulk of the increase came from higher energy costs. Read more
Producer prices surge 1.8% in June, led by energy costs
U.S. producer prices jumped to double the level expected, as surging energy prices weighed in heavily for the month.
The Producer Price Index (PPI) rose by 1.8% in June, the biggest increase since November 2007, according to a Labor Department report released Tuesday. The PPI measures prices at the factory door and inflation pressures before they reach the consumer.
The June PPI increase follows a 0.2% rise in May when energy costs had increased 2.9%. While gasoline prices have declined in recent weeks and in particular during early July, they are not reflected in June numbers, which shows energy prices climbed 6.6% — with heating oil costs rising 15.4% and gasoline prices soaring 18.5%.
"Sharply higher gasoline prices are the primary culprit behind the jump in the headline number," Tom Porcelli, a senior economist at RBC Capital Markets in New York, was quoted on Bloomberg. For other items, he said, "the risk is skewed toward prices remaining soft over the near term."
Producer prices inch 0.2% higher on energy prices, inflation in check
U.S. producer prices picked up in May, but they were less than expected despite increasing costs at the pump.
The Producer Price Index (PPI) rose by 0.2% last month, according to a report on Tuesday released by the Labor Department. The PPI measures prices at the factory door and inflation pressures before they reach the consumer.
"This clearly suggests there’s no inflation yet," Anika Khan, an economist at Wachovia Corp. in Charlotte, North Carolina, was quoted on Bloomberg. Price gains are "a gasoline story… companies can’t pass on the prices because the consumer is not in a situation to pay right now."
The PPI has fallen 5.0% in the past twelve months and is the biggest year-over-year decline since 1949. Read more
Producer prices rise 0.3% on higher food prices
Producer prices in the U.S. reversed course from March and climbed to a higher than expected 0.3% in April, according to the Labor Department’s Producer Price Index (PPI) report on Thursday. The PPI measures prices at the factory door and inflation pressures before they reach the consumer.
In March, cheaper energy pushed down prices by 1.2%, leading to renewed fears of accelerating deflation. In April, the government data shows that a 1.5% increase in the cost of food offset a 0.1% fall in energy prices — energy costs were down 5.5% in March. And with that, some of the deflationary steam has been evaporated. Deflation is a persistent decrease in general prices, or the opposite of inflation.
"It’s impossible to see how deflation can persist given the amount of liquidity in the system," Maxwell Clarke, chief U.S. economist at 4Cast.com in New York, was quoted on Bloomberg. "With oil moving back up, the thought in people’s minds becomes that inflation could ultimately become a problem that outweighs deflation."
It is worth noting that the PPI index has fallen 3.7% when compared to the same period last year, marking the biggest year-over-year fall since January 1950. Read more
Cheap energy pushes producer prices down 1.2%
U.S. Producer prices fell 1.2% in March as lower energy prices drove down costs more than expected, according to a Labor Department report released Tuesday.
The Producer Price Index (PPI) measures prices at the factory door and inflation pressures before they reach the consumer. In a reversal after two months of gains, the latest PPI figures again raise notes of deflationary concern for some economists. However, they are outweighed by the Fed’s mission to spur economic activity.
"Clearly, deflation is a concern right now, though the biggest worry is to restore growth," Anika Khan, an economist at Wachovia Corp. in Charlotte, North Carolina, was quoted on Bloomberg. With inflation contained, "it gives the Fed more room to try to restore growth."
Deflation is a persistent decrease in general prices, or the opposite of inflation. Falling prices may seem like good news for consumers, but only to a certain extent. If prices mark sustained deflationary levels that strike below the cost to produce goods and services, further economic turmoil can ensue with production cuts, payroll reductions and deepening unemployment. Read more