The Producer Price Index for finished
goods saw its highest jump since September of 1990, immediately raising
inflation concerns and serving notice the the Federal Reserve that a more
cautious approach to interest rate cuts may be necessary. After no change in
December, the PPI rose 1.1% in January while the core rate, which excludes foods
and energy, increased 0.7%. Both numbers were well above analyst expectations.
In the manufacturing industry, prices for
nondurable manufacturing materials made the biggest play, rising 1.1%.
A 15.3% rise in liquefied petroleum prices
helped fuel a 3.8% increase for the finished energy goods index. Additional
finished goods details for January are as follows:
- Before seasonal adjustment, the index for finished
goods rose 1.1% to 141.2 (1982=100).
- Over the past 12 months, prices for finished goods
and finished energy goods increased 4.8% and 21.6%, respectively.
- The finished consumer goods index advanced 0.8%,
after falling 0.4% in December.
- Despite a 5.4% fall for the electronic computer
index, the capital equipment index rose 0.3%, after a 0.1% gain in
- Price gains: passenger cars (1.2%), heavy/light motor trucks,
- Price drops: communication equipment, construction
The producer price index for intermediate materials,
supplies, and components followed a 0.2% rise in December with an additional
0.7% gain in January. Prices for intermediate energy goods continued to rise
(3.1%), including the highest price increase for commercial electric power since
1980 (3.9%) and record-setting jumps for the commercial natural gas index and
the natural gas to electric utilities index. January index results for
construction and manufacturing materials are as follows:
- Durable manufacturing materials: down 0.7% (up 0.2%
- rising prices: hardwood lumber, prepared paint, primary
- falling prices: steel mill products (1.7%), aluminum mill shapes,
softwood plywood, copper and brass mill shapes
- Nondurable manufacturing materials: up 1.1% (down
0.1% in December)
- rising prices: plastic resins/materials, organic
- falling prices: finished fabrics, synthetic
- Construction materials/components: down 0.3% (up
0.1% in December)
- rising prices: millwork, heating equipment, fabricated
- falling prices: softwood lumber, asphalt coatings,
fabricated structural metal products, plywood, gypsum products, nonferrous
The Index for Crude Materials for Further Processing
advanced 13.9% in January, the largest increase since August 1983; the index for
industrial materials also rose.
Net Output of Total Domestic
The Index for Net Output of Total Domestic
Manufacturing Industries rose 0.2% in January, after 0.4% drop the previous
month. The index stood at 134.7 (December 1984 = 100), increasing 3.0% over the
last 12 months.
Some changes for the net output of major industry
groups are listed below.
change, Dec to Jan
|Rubber and |
The February 2001 Producer Price Index report will be
released on March 16, 2001.
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