Tuesday, December 15, 2009

First Year-0ver-Year Increase in Producer Price Index in 12 Months

The Producer Price Index for Finished Goods rose 1.8 percent in November, seasonally adjusted, the Bureau of Labor Statistics reported today. This increase followed a 0.3-percent advance in October and a 0.6-percent decrease in September.

In November, at the earlier stages of processing, prices received by manufacturers of intermediate goods climbed 1.4 percent, and the crude goods index rose 5.7 percent.

On an unadjusted basis, prices for finished goods moved up 2.4 percent for the 12 months ended November 2009, their first 12-month increase since November 2008.

Despite this increase, it does not appear there is any significant short-term price inflation threat. Particularly since about three-fourths of the November advance in the finished goods index can be traced to higher prices for energy goods, which jumped 6.9 percent. Since then energy prices have pulled back substantially.

The index for intermediate energy goods rose 5.4 percent in November, its second consecutive monthly increase. A major factor in the November advance was an 18.8- percent surge in jet fuel prices.

The index for crude energy materials increased 12.2 percent in November. From August to November, this index rose 15.0 percent compared with a 12.6-percent rise in the 3 months ending in August. Accounting for about two-thirds of the monthly November increase, the index for natural gas jumped 25.5 percent. Higher prices for both crude petroleum and coal
also contributed to the advance in the crude energy materials index.

Since December 1, crude oil has dropped approximately $10 per barrel from the $79 range to the $69 range.

1 comment:

  1. How is inflation rising when the Fed isn't printing any money?