Cheap Gas Pushes Producer Prices Down 0.7%
The Producer Price Index for finished goods fell by a seasonally adjusted 0.7% for April, according to a Labor Department report (link opens in PDF) released today. After falling 0.6% for March, market analysts' overall April prediction proved to be right on the money.
Although the Index continues its decline for the second straight month, volatile food and energy prices can sometimes skew the overall direction of the core data included in the analysis. For April, food and energy (mostly gasoline) prices dropped 0.8% and 2.5%, respectively, pulling down overall results. Excluding prices of these two goods, prices managed a slight 0.1% increase.
Looking earlier up the supply chain, prices for intermediate goods fell 0.6% as a result of lower diesel, gasoline, and jet fuel prices. Primary basic organic chemicals also dropped 5.3%.
Crude goods prices completed the decline trifecta, down 0.4% for April. But unlike both intermediate and finished goods, the price drop was primarily due to a 2.6% drop in prices for foodstuffs and feedstuffs. Energy prices managed a 4.7% increase, potentially pointing to higher prices ahead.
In the last 12 months, finished goods prices have bumped up 0.6%, while intermediate goods prices have dropped 0.6% and crude goods are down 0.4%.
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