Tags: wholesale | prices | economy | inflation

Revamped Wholesale Prices Increased 0.2 Percent in January

Wednesday, 19 Feb 2014 08:51 AM

Producer prices in the U.S. increased in January, led by gains in goods such as food and pharmaceuticals.

The 0.2 percent advance in the producer-price index followed a 0.1 percent rise the prior month, a Labor Department report showed today in Washington. The median estimate in a Bloomberg survey called for a 0.1 percent increase. Excluding volatile food and energy, it also rose 0.2 percent.

Today’s data mark the debut of the PPI after its first major overhaul since 1978, which more than doubles its reach of the economy by including prices received for goods, services, government purchases, exports, and construction. The lack of pipeline pressures, one reason inflation is running below the Federal Reserve’s target, has given policy makers room to keep borrowing costs low to spur growth.

“Pipeline pressures aren’t going to be an issue,” Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida, said before the report. “The concern is that inflation will stay too low. The Fed’s focus stays on growth.”

Another report today showed the pace of home construction declined more than forecast in January, indicating an unusually harsh winter probably played a role in slowing projects.

Housing starts fell 16 percent to an 888,000 annualized rate following December’s revised 1.05 million, according to data from the Commerce Department. The decrease was the biggest since February 2011. The median estimate of 84 economists surveyed by Bloomberg called for 950,000. Permits for future projects showed a smaller drop, a sign activity may stabilize as the weather improves.

New PPI

The revamped PPI encompasses 75 percent of the economy, up from a third of all production for the old index, which reflected the costs of goods alone.

Since services represent the biggest part of the economy, the gauge will offer a better look at inflation at the producer level and its scope will be similar to the government’s indexes of prices paid by American consumers.

Goods will account for about 24 percent of the new PPI gauge, while services -- including financial services, food wholesalers and transportation providers -- make up 63 percent. Prices received from government purchases and exported goods represent 11 percent, and construction is 2 percent.

For January, estimates in the Bloomberg survey of 65 economists ranged from a drop of 0.3 percent to a gain of 0.4 percent.

Wholesale prices excluding food and energy were projected to rise 0.1 percent, after no change the prior month, the survey median showed.


© Copyright 2017 Bloomberg News. All rights reserved.

   
1Like our page
2Share
Economy
Producer prices in the U.S. increased in January, led by gains in goods such as food and pharmaceuticals.The 0.2 percent advance in the producer-price index followed a 0.1 percent rise the prior month, a Labor Department report showed today in Washington.
wholesale,prices,economy,inflation
412
2014-51-19
Wednesday, 19 Feb 2014 08:51 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved