Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  The Producer Price Index Rose 0.5% in January
Posted Under: Data Watch • PPI

 

Implications:  Producer prices surged 0.5% in January, the largest monthly increase since late 2018.  With the January rise, producer prices are up 2.1% in the past year, breaching the 2% level last seen in May of 2019.  Services led prices higher in January, rising 0.7%, while prices for goods increased 0.1%.  Goods prices were held lower by energy costs, which declined 0.7%.  Food prices rose 0.2% in January, as rising costs for vegetables and grains more than offset a decline in prices for eggs.  Strip out the typically volatile food and energy categories, and "core" prices also rose 0.5% in January, tied for the largest monthly increase since the series began back in 2010.  Within core prices, the rise was led by margins to retailers, particularly apparel, jewelry, footwear, and accessories, which saw prices jump 10.3% in January.  "Core" goods rose 0.3% in January, with prices for iron and steel scrap up 13.9%.  In the past year, services prices are up 2.0% while goods prices are up 1.8%.  Core prices as a whole are up 1.7% over the past twelve months.  We expect core prices to follow the headline number toward 2% in 2020. Further down the pipeline, prices for intermediate demand processed goods declined 0.3%, while intermediate demand unprocessed goods fell 0.6%.  Both intermediate demand categories continue to show prices broadly lower compared to year-ago levels.  Taken altogether, today's report reinforces the Fed's plan to leave rates unchanged in 2020.  Core consumer inflation stands above 2% on a twelve-month basis, while core PCE prices (the Fed's preferred measure) are up 1.6% in the past year.  Paired with the very healthy employment market, these signal an economy with no need for more Fed rate cuts.  In recent manufacturing news, the Empire State Index, which measures factory sentiment in the New York region, jumped to +12.9 in February from +4.8 in January as rising orders and shipments led the index higher.  We're still waiting in other regional surveys arriving late this month, but the gain in the Empire index hints at an increase in the national manufacturing index for February. 

Click here  for PDF version

Posted on Wednesday, February 19, 2020 @ 11:21 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2020 All rights reserved.