U.S. Wholesale Prices Show Moderating Trend
Economics / Inflation Nov 16, 2011 - 01:34 AM GMTBy: Asha_Bangalore
The Producer Price Index (PPI) of Finished Goods fell 0.3% in October after a 0.8% jump in the prior month. A 1.4% drop of the energy price index was responsible for about two-thirds of the decline in the wholesale price index. The core PPI, which excludes food and energy, held steady in October after ten monthly gains. Lower prices for cars and trucks offset price hikes of other core items.
At the earlier stages of production, the core intermediate good price rose 6.3% from a year ago. This represents a decelerating trend following an increase of 7.8% in July (see Chart 3). It is important to note that the core intermediate goods price leads the finished goods core price index by six months. In other words, the current moderation of core intermediate prices points to a likely moderation in the finished goods price index in the months ahead.
Asha Bangalore — Senior Vice President and Economist
http://www.northerntrust.com
Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.
Copyright © 2011 Asha Bangalore
The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.
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