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Strategies & Market Trends : The Amateur Traders Corner -- Ignore unavailable to you. Want to Upgrade?

To: Paul Kern who wrote (9252)	5/11/2001 8:36:48 AM
From: Paul Kern	Respond to of 19633

U.S. Producer Price Index Rose 0.3% in April; Core Rose 0.2% By Siobhan Hughes and Vincent Del Giudice Washington, May 11 (Bloomberg) -- Prices paid to U.S. factories, farmers and other producers showed their largest increase in three months in April, led by higher prices for gasoline, government figures showed today. The producer price index rose 0.3 percent last month after falling 0.1 percent in March, the Labor Department said. The increase was the largest since a gain of 1.1 percent in January. The core index, which excludes energy and food, rose 0.2 percent in April after rising 0.1 percent in March. Computer prices rose for the first time in more than six years. Automobile prices also rose. Today's numbers show the threat of wholesaler inflation is confined to energy prices, making it easier for stores to keep consumer prices in check and for Federal Reserve policy makers to lower interest rates next week. ``Price pressures have been abating for months thanks to falling commodity prices and manufacturing belt tightening,'' said Christopher Low, chief economist at First Tennessee Capital Markets in New York. Fed policy-makers are likely to lower interest rates at their next meeting Tuesday, the fifth reduction this year, to keep the economy from sliding into recession. The target rate for overnight loans between banks is 4.5 percent after starting the year at 6.5 percent. Analysts had expected a 0.3 percent increase in the total index and a 0.1 percent rise in the core index. Energy Prices Energy prices rose 0.1 percent in April after falling 2.6 percent during March. Refinery shutdowns have pushed gasoline prices higher, even as the price of crude oil remains below $30 a barrel. The price of unleaded gas for June delivery averaged 93.86 cents a gallon on the New York Mercantile Exchange during the first two weeks of the month, when prices are reported. That was up from an average of 87.43 cents a gallon in March. Food prices rose 0.6 percent in April after rising 1.1 percent during March. Prices received by farmers increased 3.9 percent in April from month earlier, led by gains for strawberries, milk, oranges and hay. Prices fell for tomatoes, broilers, soybeans and corn. Automobile prices rose 0.2 percent. Prices of prescription drugs rose 0.5 percent in April. Two dozen drugs accounted for more than half of the rise in spending on retail pharmaceuticals last year as patients sought newer, more expensive treatments such as Merck & Co.'s Vioxx painkiller and Pfizer Inc.'s cholesterol pill Lipitor, a study showed. Spending on retail outpatient prescription drugs rose 19 percent to $131.9 billion in 2000 from $111.1 billion in 1999, according to a report from the National Institute for Health Care Management, a non-profit research group partly financed by Blue Cross insurance plans. Just 23 drugs of 9,911 drugs on the market made up 50.7 percent of the increase, according to the study. Computer Prices Prices for computers rose 1.5 percent during April, the first increase since September 1994 and the largest since a 0.7 percent gain in September 1993. Even so, the increases may not show up with consumers. Dell Computer Corp., the biggest U.S. personal-computer maker, No. 2 maker Hewlett-Packard Co. and Compaq Computer Corp. are slashing prices on corporate desktop computers, Cnet.com reported last week. Prices fell 0.2 percent for intermediate goods, which include chemicals, fuel, parts, textiles, lumber and components. Those prices had fallen 0.2 percent in March. Lumber prices surged from $230.50 for a thousand board feet at the start of the month to $292.60 April 30 on the Chicago Mercantile Exchange. Warmer weather has encouraged home building, and Canadian lumber did not flood the U.S. as expected after restrictions ended, analysts said. Semiconductor prices have fallen, with the cost of a 64- megabit chip down to $2.04 early this month after starting April at $2.63, according to Converge Inc., an online exchange. Intermediate goods prices fell 0.2 percent in April, the same as in March. The cost of intermediate goods excluding food and energy fell 0.1 percent after rising 0.1 percent a month earlier. Prices rose 0.9 percent for crude goods -- raw materials including coal, grains, crude oil, ores and scrap metal. Those prices had fallen 1.7 percent in March. Crude goods prices excluding food and energy fell 2.6 percent in April after falling 1.3 percent in March.