–YOY Rates are +4.8% Overall PPI and +3.0% Core PPI
By Joseph Plocek
WASHINGTON (MNI) – The December producer price data left the core
inflation rate a little elevated for all of 2011 but otherwise probably
simply reflect bad seasonals and turn-of-year pricing.
December PPI printed -0.1% and core +0.3% (0.03346% unrounded and
its biggest gain since July). These resulted in rates of +4.8% overall
and +3.0% core over the year.
Core inflation in the PPI was running at its worse rate since +3.3%
for the year ended in June 2009. But there were few signs that price
hikes are entrenched in the pipeline.
Foods printed -0.8% (fruits & vegetables, pork and chicken fell)
and Energy -0.8% (gasoline was -2.3%, but several other areas fell too).
These held down the overall index.
But core was boosted by cars at +0.4% (unadjusted -0.1%), light
trucks +0.9% (NSA -0.1%), cigarettes +1.1% and pharmaceuticals +1.2%
(NSA +1.0%). Some of these hikes may be turn-of-year anomalies due to
bad adjustment (autos, where a government economist said foreign supply
issues altered pricing and availability of parts) or list-price hikes
(pharmaceuticals). They are not especially worrisome.
Moreover, there are signs inflation will moderate ahead.
Intermediate PPI printed -0.5% and Crude -1.1% as foods and energy costs
fell at these levels as well. In crude, scrap iron and steel printed
+6.6%, its biggest gain since +12.0% in January 2011.
New seasonal adjustments and new category weights will be
available Feb. 14, the Bureau of Labor Statistics said, before the next
PPI release on Feb. 16. These have the potential to alter the PPI
landscape slightly.
**Market News International Washington Bureau: (202)371-2121**
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