Thursday, February 16, 2012

PRODUCER PRICE INDEXES - JANUARY 2012


The Producer Price Index for finished goods advanced 0.1 percent in January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today.

Prices for finished goods declined 0.1 percent in December and moved up 0.2 percent in November. At the earlier stages of processing, the index for intermediate goods fell 0.4 percent in January, and crude goods prices increased 1.5 percent.

On an unadjusted basis, the finished goods index advanced 4.1 percent for the 12 months ended January 2012, the smallest year-over-year rise since a 3.6-percent increase in
January 2011.

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Finished goods

In January, the rise in finished goods prices can be attributed to the index for finished goods less foods and energy, which moved up 0.4 percent. By contrast, prices for finished energy goods and for finished consumer foods declined 0.5 percent and 0.3 percent, respectively.

Finished core: The index for finished goods less foods and energy moved up 0.4 percent in January, the largest increase since a 0.5-percent rise in July 2011. In January, about forty percent of the finished core advance can be attributed to prices for pharmaceutical preparations, which
climbed 2.0 percent. Higher prices for light motor trucks and household appliances also were factors in the increase in the finished core index. (See table 2.)

Finished energy: The index for finished energy goods fell 0.5 percent in January, the fourth straight monthly decrease. Leading the January decline, prices for residential electric power moved down 1.7 percent. Falling prices for residential natural gas also contributed to the
decrease in the index for finished energy goods.

Finished foods: Prices for finished consumer foods moved down 0.3 percent in January after falling 0.9 percent in December. Over eighty percent of the January decline can be attributed to the index for fresh and dry vegetables, which fell 8.8 percent.

Intermediate goods

The Producer Price Index for intermediate materials, supplies, and components moved down 0.4 percent in January following a 0.2-percent decline in December. Over three-fourths of the broad-based decrease in January is attributable to prices for intermediate energy goods, which fell 1.4
percent. Also contributing to the decline in intermediate goods prices, the index for intermediate goods less foods and energy inched down 0.1percent, and prices for intermediate foods and feeds decreased 0.4 percent. For the 12 months ended in January, the intermediate goods index
rose 4.2 percent, the smallest year-over-year advance since a 2.9-percent increase in December 2009. (See table B.)

Intermediate energy: Prices for intermediate energy goods fell 1.4 percent in January after two consecutive increases. The index for utility natural gas, which dropped 2.7 percent, was a major contributor to this decrease. Lower prices for commercial electric power and residual fuel also were factors in the decline in the intermediate energy goods index. (See table 2.)

Intermediate core: Prices for intermediate goods less foods and energy edged down 0.1 percent in January, the fourth consecutive decline. Leading the January decrease was the index for basic organic chemicals, which fell 4.4 percent. Lower prices for cold rolled steel sheet and strip also contributed to the decline in the intermediate core index.

Intermediate foods: The index for intermediate foods and feeds fell 0.4 percent in January following a 0.8-percent decrease in December. A 5.4-percent drop in prices for natural cheese (except cottage cheese) accounted for most of the January decline in the intermediate foods and
feeds index.

Crude goods

The Producer Price Index for crude materials for further processing moved up 1.5 percent in January. For the 3-month period ending in January, crude material prices rose 2.6 percent following a 1.1-percent decline from July to October. In January, nearly half of the broad-based monthly advance is attributable to a 1.6-percent increase in prices for crude energy materials. Also contributing to the January advance, the index for crude foodstuffs and feedstuffs moved up 1.6 percent, and prices for crude nonfood materials less energy rose 0.6 percent. (See table B.)

Crude energy: The index for crude energy materials increased 1.6 percent in January. For the 3-month period ending in January, prices for crude energy materials climbed 7.5 percent subsequent to a 2.2- percent decline for the 3 months ended October 2011. A 5.7-percent jump in the index
for crude petroleum was responsible for the January monthly advance in crude energy prices. (See table 2.)

Crude foods: The index for crude foodstuffs and feedstuffs increased 1.6 percent in January. From October to January, prices for crude foodstuffs and feedstuffs edged down 0.2 percent after rising 0.9 percent in the 3 months ended October 2011. Almost sixty percent of the monthly advance in January can be traced to a 6.4-percent increase in the corn index. Higher prices for slaughter steers and heifers and for soybeans also were factors in the rise in the crude foodstuffs and feedstuffs index.

Crude core: The index for crude nonfood materials less energy moved up 0.6 percent in January. For the 3 months ending in January, crude core prices fell 1.7 percent subsequent to a 2.9-percent decline from July to October. The January monthly rise was led by a 3.3-percent increase in the index for carbon steel scrap. Higher prices for corn also contributed to the advance in the crude core index.

Read the full blow report with Tables





Original content Bob DeMarco, All American Investor