RJS, MarketWatch 666 ~~~~~~~ Summary: Producer Prices Rose 0.8% in May; Record Annual Increase of 16.6% for Final Demand Goods The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.8% in May, as average prices for finished wholesale goods rose by 1.4% while final demand for services was 0.4% higher. The increase followed a revised 0.4% increase in April, when average prices for finished wholesale goods rose by 1.3% while final demand for services was 0.2% lower. Also following a revised 1.6% increase in March, when average prices for finished wholesale goods rose by 2.4% and final demand for services rose 1.2% and a revised 1.1% increase in February, when average prices for finished wholesale goods rose by 2.2%. Margins
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RJS, MarketWatch 666
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Summary: Producer Prices Rose 0.8% in May; Record Annual Increase of 16.6% for Final Demand Goods
The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.8% in May, as average prices for finished wholesale goods rose by 1.4% while final demand for services was 0.4% higher. The increase followed a revised 0.4% increase in April, when average prices for finished wholesale goods rose by 1.3% while final demand for services was 0.2% lower. Also following a revised 1.6% increase in March, when average prices for finished wholesale goods rose by 2.4% and final demand for services rose 1.2% and a revised 1.1% increase in February, when average prices for finished wholesale goods rose by 2.2%. Margins of final services providers rose 0.5%, and a revised 1.2% increase in January, when wholesale goods prices rose 1.6% and the price index for final demand for services rose 0.9%…on an unadjusted basis, producer prices are now 10.8% higher than a year ago, down from the revised 10.9 year over year increase now shown for April’s producer prices, while the core producer price index, which excludes food, energy and trade services, rose by 0.5% for the month, and is now 6.8% higher than in a year ago, same as the revised year over year core PPI increase that is now indicated for April…note that the BLS is now revising the PPI going back five months, so the figures we cite for those months were revised, whether we note it or not..
As we noted, the producer price index for final demand for goods, which was previously aggregated as ‘finished goods’, was 1.4% higher in May, after being 1.3% higher in April, 2.4% higher in March, to 2.2% higher in February, to 1.6% higher in January, and after being 0.1% lower in December, 0.9% higher in November, 1.3% higher in October. 1.2% higher in September, 1.0% higher in August, 0.8% higher in July, 1.3% higher in June, 1.4% higher in May, and 1.0% higher in April of last year, and hence is now up by a record 16.56% from a year ago, topping April’s 16.32% record annual increase….the finished goods price index rose 1.4%, as the price index for wholesale energy goods was 5.0% higher in May, after it had risen by a revised 1.6% in April, by a revised 6.5% in March, and by a revised 7.2% in February, while the price index for wholesale foods was unchanged, after rising by1.4%% in April and 2.4% in March, and while the index for final demand for core wholesale goods (excluding food and energy) rose 0.7% in May, after rising a revised by 1.1% in both March and April . . . wholesale energy prices averaged 5.0% higher on a 8.0% increase in wholesale prices for gasoline, a 10.6% increase in wholesale prices for home heating oil, and a 6.2% increase in wholesale prices for residential natural gas, while the final demand food price index was unchanged as a 6.0% increase in the wholesale price index for processed turkeys, a 4.6% increase in the wholesale price index for processed chickens, and a 3.5% increase in the wholesale price index for fresh and dry vegetables was offset by a 9.5% decrease in the wholesale price index for beef and veal, and a 7.6% decrease in the wholesale price index for pork….among core wholesale goods, the final demand price index for industrial chemicals rose 2.9%, the final demand price index for metal forming machine tools rose 2.6%, the final demand price index for transformers and power regulators rose 2.1%. the final demand price index for wholesale sporting and athletic goods rose 2.5%, the final demand price index for pumps, compressors, and related equipment rose 2.3%, and the wholesale price index for cigarettes rose 2.6%….
Meanwhile, the price index for final demand for services was 0.4% higher in May, after falling by a revised 0.2% in April, and rising by 1.2% in March, and is now up by 7.6% from a year ago, down quite a bit from the record 9.2% year over year increase that was reported for March. The price index for final demand for trade services rose 0.4%, the price index for final demand for transportation and warehousing services rose 2.9%, while the core index for final demand for services less trade, transportation, and warehousing services was 0.1% higher…among trade services, seasonally adjusted margins for lawn, garden, and farm equipment and supplies retailers rose 5.5%, margins for automobile retailers rose 3.3%, margins for furniture retailers rose 3.6%, and margins for apparel, jewelry, footwear, and accessories retailers rose 2.7%, while margins for fuel and lubricants retailers fell 21.7%….among transportation and warehousing services, average margins for airline passenger services rose 2.9%, margins for truck transportation of freight also rose 2.9%, and margins for rail transportation of freight and mail rose 2.7%…among the components of the core final demand for services index, the price index for arrangement of cruises and tours rose 5.1%, the price index for securities brokerage, dealing, investment advice, and related services rose 5.5%, and the price index for mining services rose 2.8%, while the price index for portfolio management fell 1.9%, the price index for traveler accommodation services fell 3.3%, and the price index for passenger car rental fell 5.6% …
This report also showed the price index for intermediate processed goods rose 2.3% in May, after rising a revised 2.0% in April, 2.3% in March, and by a 1.5% in February. The price index for intermediate energy goods rose 4.6% in April, as producer prices for natural gas to electric utilities rose 23.7%, producer prices for industrial natural gas rose 16.2%, refinery prices for jet fuel rose 12.0%, and refinery prices for gasoline rose 8.4%. At the same time, the price index for intermediate processed foods and feeds rose 0.9%, as the producer price index for processed poultry rose 5.1%, the producer price index for fats & oils rose 4.0% and the producer price index for prepared animal feeds rose 1.8%…meanwhile, the core price index for intermediate processed goods less food and energy goods rose 1.7% as the producer price index for paint materials rose 3.9%, the producer price index for nitrogenates rose 11.8%, the producer price index for steel mill products rose 10.7%, the producer price index for hardwood lumber rose 2.9%, the producer price index for paving mixtures and blocks rose 2.8%, and the producer price index for metal valves, except those for fluid power, rose 3.2%, while the producer price index for primary nonferrous metals fell 12.0%…average prices for intermediate processed goods are still 21.6% higher than in May a year ago, down from the 21.9% year over year increase shown for April, and down from.their 26.6% year over year increase in November, which had been a 46 year high….
At the same time, the price index for intermediate unprocessed goods rose 6.3% in May, after rising a revised 6.1% in April, by 2.7% in March, and by 10.0% in February….that was as the May price index for crude energy goods rose 16.3%, as unprocessed natural gas prices rose 39.7% and coal prices rose 3.9%, while crude oil prices fell 1.6% …at the same time, the price index for unprocessed foodstuffs and feedstuffs was 0.9% higher on a 1.6% increase in producer prices for slaughter cattle, a 1.1% increase in producer prices for wheat, a 5.9% increase in producer prices for raw milk, a 10.1% increase in producer prices for alfalfa hay, and a 1.5% increase in producer prices for slaughter turkeys….meanwhile, the index for core raw materials other than food and energy materials was 4.2% lower, on a 11.8% decrease in the price index for iron and steel scrap, an 8.2% decrease in the price index for aluminum scrap, a 7.0% decrease in the price index for copper base scrap, and a 6.0% decrease in the price index for recyclable paper…..this raw materials index is now 48.5% higher than a year ago, down from the 50.8% year over year increase in April, and down from the record 59.2% annual increase in April 2021, and now the nineteenth consecutive year over year increase for this index, after the annual change on this index had been negative from the beginning of 2019 through October of 2020…
Lastly, the price index for services for intermediate demand was 0.6% higher in May, after being a revised 0.7% higher in April, 1.2% higher in March, and 0.2% higher in February, after rising 0.8% in January, by 0.8% in December, and by 0.6% in November. The price index for intermediate trade services rose 0.6%, as margins for machinery and equipment parts and supplies wholesalers rose 1.4%, margins for intermediate chemicals and allied products wholesalers rose 3.7%, and margins for intermediate metals, minerals, and ores wholesalers rose 3.1%…at the same time, the index for transportation and warehousing services for intermediate demand was 1.0% higher, as the intermediate price index for water transportation of freight rose 12.5%, the intermediate price index for truck transportation of freight rose 2.9%, the intermediate price index for air mail and package delivery services (not by USPS) rose 3.7%, the intermediate price index for transportation of passengers rose 2.8%, while the intermediate price index for arrangement of freight and cargo was 5.8% lower …. at the same time, the core price index for intermediate services other than trade, transportation, and warehousing services rose 0.6%, as the intermediate price index for radio advertising time sales rose 7.5%, the intermediate price index for securities brokerage, dealing, investment advice, and related services rose 5.5%, the intermediate price index for business loans rose 3.9%, and the intermediate price index for executive search services rose 3.3%….over the 12 months ended in May, the year over year price index for services for intermediate demand is now 7.7% higher than it was a year ago, the twentieth consecutive positive annual increase in this index change since it briefly turned negative year over year from April to August of 2020, while it is still down from the record 9.5% year over year increase indicated for July….