US BLS:MINUS IN PPI ALL SEASONAL ADJUSTMENT;'00 CORE ANN 1.2%
--PPI Before Seasonal Adjustment a Flat Zero; Down 0.3% After Adjustment --Without Energy, Finished Goods Index Up 0.3% --Core Rate Moving Up 'Much Faster' Than a Year Ago
By Denny Gulino
WASHINGTON (MktNews) - The seasonal adjustment factor turned a flat Producer Price Index into the decline of 0.3% that was expected while the adjusted April core rate rose 0.1% -- but measured energy prices showed much less decline than market prices had suggested, the Bureau of Labor Statistics reported Friday morning.
The core rate is moving up at an annual rate of 1.2% so far this year, compared to the 0.2% decline in the annual rate for the first four months of last year after adjustment. The finished goods index is up at an annual adjusted rate of 5.4% this year through April.
Overall, "It was good news for people looking for a negative number, but the underlying rate and the core were not much different," senior BLS analyst Brian Catron told Market News International as the report was being made public. The core rate, he noted, is "moving up much faster than a year ago."
At the other end of the supply line, crude goods prices dropped 2.5% overall and crude core, helped down by raw cotton, scrap aluminum and gold ore, fell 1.2%, the most in over a year.
The seasonal adjustment factor, expecting the usual April price increases as refineries changed to summer production, amplified the modest measured energy downturn.
The overall energy index for finished goods fell 4.1% after adjustment, but only 2.1% before. Gasoline prices plummeted 11.7% after adjustment, only 4.1% before. Therefore before seasonal adjustment the overall finished goods index did not show a decline, just a zero change. While not the downside surprise some had hoped for, it was still in sharp contrast to the 1.0% jumps of the previous two months.
Analysts who were tracking the weekly Energy Department measure of gasoline and other oil-related prices saw double-digit declines which did not show up in the PPI report. "They don't do the same timing and measure more often than we do, so it's not exactly a great fit," Catron said.
Food prices rose a full 1.0% in April as anticipated, the most since January of last year.
Intermediate goods prices slipped 0.1% overall and core intermediate goods were up 0.4%, the same as the previous month. Intermediate goods are up 5.3% in 12 months.
Raw materials prices fell 2.5% overall, and core crude prices were off 1.2%. Yet crude goods prices are still up 21.4% in 12 months. In March, they had been up 27.3% in a year. The core crude material that Catron said was the "biggest impactor" for the month's decline was an 11.6% downturn in raw cotton. Aluminum based scrap, down 5.6%, and gold ores, down 3.6%, also contributed to the direction.
Expectations in a Market News International survey of 21 economists had centered on an overall decline of 0.3%, but a core rate that was up 0.1%. |
