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Producer Prices Rises 0.8% in May

Summary:
Producer Price Index YoY Records for Final Demand and Intermediate Services; 46 year High for Intermediate Goods, 48 year High for Raw Materials Commenter RJS and MarketWatch 666 blogger The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.8% in April, as prices for finished wholesale goods rose 1.5% while margins of final services providers rose 0.6%…that increase followed an April report that the PPI was 0.6% higher, as prices for both finished wholesale goods and margins of final services providers rose 0.6%, a March report that had the PPI 1.0% higher, as prices for finished wholesale goods rose 1.7% while margins of final services providers rose 0.7%, a revised February report that now has the PPI 0.6% higher, with

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Producer Price Index YoY Records for Final Demand and Intermediate Services; 46 year High for Intermediate Goods, 48 year High for Raw Materials

Commenter RJS and MarketWatch 666 blogger

The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.8% in April, as prices for finished wholesale goods rose 1.5% while margins of final services providers rose 0.6%…that increase followed an April report that the PPI was 0.6% higher, as prices for both finished wholesale goods and margins of final services providers rose 0.6%, a March report that had the PPI 1.0% higher, as prices for finished wholesale goods rose 1.7% while margins of final services providers rose 0.7%, a revised February report that now has the PPI 0.6% higher, with prices for finished wholesale goods on average 1.4% higher, while margins of final services providers increased by 0.2%, and a re-revised January report that now has the PPI 1.2% higher, with average prices for finished wholesale goods rising 1.6%, while margins of final services providers increased by 1.0%….on an unadjusted basis, producer prices are now a record 6.8% higher than a year ago, up from the 6.2% year over year increase indicated by last month’s report, while, the core producer price index, which excludes food, energy and trade services, rose by 0.7% for the month, and is now 5.3% higher than in May a year ago, up from the 4.6% year over year increase as was shown in April . . .

As noted, the price index for final demand for goods, aka ‘finished goods’, was 1.5% higher in April, after being 0.6% higher in April, 1.7% higher in March, 1.4% higher in February, 1.6% higher in January, 0.9% higher in December, 0.4% higher in November, 0.5% higher in October, 0.4% higher in September, 0.4% higher in August, 0.5% higher in July, 0.4% higher in June, and 1.4% higher in May of last year, and hence is now up by a record 11.1% from a year ago….the finished goods price index rose 1.5% in May because the price index for wholesale foods rose 2.6%, after rising by 2.1% in April, 0.5% in March, rising a revised 1.4% in February, and rising a revised 1.6% in January,  and because the price index for wholesale energy goods was 2.2% higher, after it had fallen by 2.4% in April, risen by 5.9% in March, 5.8% in February, and by 5.1% in January….meanwhile, the index for final demand for core wholesale goods (excluding food and energy) was 1.1% higher, after it had risen by 1.0% in April, 0.9% in March, 0.3% in February and 0.8% in January….wholesale energy prices averaged 2.2% higher due to a 2.2% increase in wholesale prices for gasoline, a 9.2% increase in wholesale prices for No.2 diesel fuel, and a 7.1% increase in wholesale prices for LP gas, while the wholesale food price index rose 2.6% on a 10.5% increase in the wholesale price index for beef and veal, a 19.5% increase in the wholesale price index for oilseeds, and a 25.7% increase in wholesale price index for grains…among core wholesale goods, the wholesale price index for nonferrous metals rose 6.9%, the wholesale price index for iron and steel scrap rose 5.0%, the wholesale price index for commercial furniture rose 2.4%, the wholesale price index for transformers and power regulators rose 4.6%, and the wholesale price index for mobile homes rose 3.5% ..

At the same time, the index for final demand for services rose 0.6% in may, after rising 0.6% in April, 0.7% in March, a revised 0.2% in February and a revised 1.0% in January, as the index for final demand for trade services rose 0.7%, the index for final demand for transportation and warehousing services rose 1.9%, and the core index for final demand for services less trade, transportation, and warehousing services was 0.2% higher…among trade services, seasonally adjusted margins for automobile retailers jumped 27.3%, margins for hardware, building materials, and supplies retailers rose 6.9%, margins for cleaning supplies and paper products retailers rose 3.6%, margins for apparel, jewelry, footwear, and accessories retailers rose 4.1%, and margins for RVs, trailers, and campers retailers rose 3.0%, while margins for fuels and lubricants retailers fell 7.0%…among transportation and warehousing services, margins for truck transportation of freight rose 3.9% and average margins for rail transportation of freight and mail rose 1.1%…among the components of the core final demand for services index, the index for portfolio management rose 2.0%, margins for passenger car rental rose 5.4%, the index for arrangement of cruises and tours rose 8.3%, and the index for arrangement of vehicle rentals and lodging rose 4.3%, while margins for consumer loans (partial) fell 1.7% …

This report also showed the price index for intermediate processed goods rose 2.8% in May, after rising 1.6% in April, 4.0% in March, a revised 2.4% in February, a revised 1.8% in January,and 1.4% in December, 0.9% in November, 0.9% in October, 0.6% in September, 0.9% in August, 1.4% in July, and 1.2% in June, but after being unchanged in May of last year… the price index for intermediate energy goods rose 4.8% in May, as producer prices for natural gas to electric utilities rose 34.0%, refinery prices for jet fuel rose 6.7%, refinery prices for No. 2 diesel fuel rose 9.2%, producer prices for LP gas rose 7.1%, and producer prices for industrial natural gas rose 4.8%… meanwhile, the price index for intermediate processed foods and feeds rose 2.5%, as the producer price index for meats rose 4.5%, the producer price index for processed poultry rose 2.7%, and the producer price index for fats and oils rose 7.9%…at the same time, the core price index for intermediate processed goods less food and energy rose 2.3% as the producer price index for inedible fats and oils rose 15.3%, the producer price index for phosphates rose 11.3%, the producer price index for softwood lumber rose 19.2%, the producer price index for plywood rose 14.0%, the producer price index for copper and brass mill shapes rose 8.0%, the producer price index for primary nonferrous metals rose 13.6%, and the producer price index for building paper and board rose 10.8%…prices for intermediate processed goods are now 21.9% higher than in May a year ago, the largest year over year price increase since the year ended February 1975, but just the sixth increase after 19 consecutive year over year decreases, which had followed 29 months of year over year increases, which had been preceded by 16 months of negative year over year comparisons, as prices for intermediate goods fell every month from July 2015 through March 2016….

Meanwhile, the price index for intermediate unprocessed goods rose 8.4% in May, after falling 3.8% in April, rising 9.3% in March, rising a revised 3.0% in February, rising a revised 5.3% in January, and after rising by 2.1% in December, by 6.3% in November, 1.3% in October, 5.2% in September, 4.0% in August, 0.6% in July, 5.4% in June and by 8.4% last May ….that was as the May price index for crude energy goods rose 9.6% as crude oil prices rose 12.8% and unprocessed natural gas prices rose 9.8%, while coal prices fell 0.1%, while the price index for unprocessed foodstuffs and feedstuffs rose 6.3% on a 28.9% increase in the price of corn, a 19.5% increase in the price index for oilseeds, a 17.0% increase in producer prices for alfalfa hay, and a 10.7% increase in producer prices for raw milk….at the same time, the index for core raw materials other than food and energy materials rose 9.3%, as the price index for copper base scrap rose 10.7%, the producer price index for nonferrous metal ores rose 10.3%, and the price index for iron and steel scrap rose 5.0%… this raw materials index is now 57.9% higher than a year ago, the largest annual price rise since the year ended August 1973, but just the seventh year over year increase in more than 2 years, as the annual change on this index had been negative from the beginning of 2019 through October of last year…

Lastly, the price index for services for intermediate demand rose 0.8% in May, after rising 0.8% in April, 0.4% in March, a revised 0.4% in February, a revised 1.1% in January, and rising 0.7% in December after being unchanged in November, rising 0.7% in October, rising 1.1% in September, 0.8% in August, 0.5% in July, and 0.3% last June….the price index for intermediate trade services was 1.7% higher, as margins for intermediate metals, minerals, and ores wholesalers rose 6.4%, margins for intermediate hardware, building material, and supplies retailers rose 6.9%, margins for intermediate building materials, paint, and hardware wholesalers rose 3.6%, margins for chemicals and allied products wholesalers rose 2.8% and margins for intermediate paper and plastics products wholesalers rose 2.4%, …meanwhile, the index for transportation and warehousing services for intermediate demand was 1.5% higher, as the intermediate price index for arrangement of freight and cargo rose 6.0%, the intermediate price index for truck transportation of freight rose 3.6%, and the intermediate price index for rail transportation of freight and mail rose 1.1%….at the same time, the core price index for intermediate services other than trade, transportation, and warehousing services rose 0.3%, as the intermediate price index for passenger car rental rose 5.4%, the intermediate price index for investment banking rose 3.7%, the intermediate price index for internet advertising space sales other than ads sold by print publishers rose 3.5%, and the intermediate price index for portfolio management rose 2.0%, while the intermediate price index for television advertising time sales fell 4.4%…over the 12 months ended in May, the year over year price index for services for intermediate demand is now 7.9% higher than it was a year ago, the ninth consecutive positive annual change since it briefly turned negative year over year from April to August of last year, and the largest 12-month advance in the eleven year history of this index..

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