Home » Core Inflation Jumps 0.6%, Wholesale Prices Fall
Core Inflation Jumps 0.6%, Wholesale Prices Fall
October 17, 2006
The Producer Price Index for Finished Goods fell 1.3% in September, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported. This decline followed increases of 0.1% in both August and July. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved down 1.4% in September after increasing 0.4% in the preceding month, and the crude goods index dropped 3.4% following a 2.2-percent gain in August.
Among finished goods in September, prices for energy goods declined 8.4% compared with a 0.3-percent increase in August. The finished consumer foods index rose 0.7% after advancing 1.4% in the prior month. By contrast, prices for finished goods other than foods and energy climbed 0.6% in September following a 0.4-percent decline in August.
During the third quarter of 2006, prices for finished goods decreased at a seasonally adjusted annual rate (SAAR) of 4.4% after moving up at a 6.4-percent SAAR during the second quarter of 2006. Excluding prices for foods and energy, the finished goods index edged down at a 0.3-percent SAAR for the 3 months ended September 2006 subsequent to rising at a 2.3-% SAAR for the 3 months ended June 2006. Among prices for raw and partially processed goods, the intermediate goods index fell at a 1.9-percent SAAR in the third quarter of 2006 after climbing at a 10.3-percent SAAR from March to June 2006. The crude goods index moved up at an 8.0-% SAAR for the 3 months ended September 2006 following a 6.4-percent rate of increase during the previous quarter.
Before seasonal adjustment, the Producer Price Index for Finished Goods decreased 1.1% in September to 160.3 (1982 = 100). From September 2005 to September 2006, prices for finished goods rose 0.9%. Over the same period, the index for finished goods other than foods and energy went up 1.2%, prices for finished consumer foods climbed 2.2%, and the finished energy goods index declined 1.8%. For the 12 months ended September 2006, intermediate goods prices advanced 4.7%, and the crude goods index decreased 7.8%.
Finished goods The index for finished energy goods declined 8.4% in September following a 0.3-percent gain in August. Over half of this downturn was due to gasoline prices, which dropped 22.2% in September subsequent to a 2.2-percent decrease in the previous month. The indexes for home heating oil, liquefied petroleum gas, residential electric power, and diesel fuel turned down after rising in August. By contrast, the index for residential natural gas advanced 1.8% in September following a 1.6-percent increase in the prior month. During the third quarter of 2006, prices for finished energy goods fell at a 24.7-percent SAAR after moving up at a 22.3-percent SAAR during the second quarter of 2006.
Capital equipment prices increased 0.6% in September after falling 0.3% in August. The index for passenger cars moved up 2.8% following a 2.6-percent decline in the prior month. Prices for light motor trucks, communication and related equipment, commercial furniture, and for x-ray and electromedical equipment also turned up in September after declining a month earlier. By contrast, the civilian aircraft index was unchanged following a 0.4-percent gain in August. Prices for industrial material handling equipment advanced less in September than they had in the preceding month. The index for truck trailers turned down after increasing in August. For the 3 months ended September 2006, capital equipment prices rose at a 0.5-percent SAAR after climbing at a 2.5-percent SAAR for the 3 months ended June 2006.
Intermediate goods The Producer Price Index for Intermediate Materials, Supplies, and Components decreased 1.4% in September following a 0.4-percent increase in August. Most of this downturn can be traced to prices for intermediate energy goods,