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The
seasonally adjusted Consumer
Price Index for All Urban Consumers (CPI-U) increased 0.2% in March (in
line with expectations).
Increases in the energy and shelter indexes more than offset a decline in the
food index and were the main factors in the rise of the seasonally adjusted all
items index. The energy index rose 1.1% as advances in the gasoline and fuel
oil indexes outweighed declines in the electricity and natural gas indexes. In
contrast, the food index declined 0.2%, with the food at home index posting its
largest decline since April 2009.
The
index for all items less food and energy rose 0.2% in March, the same increase
as in January and February. Along with the shelter index, a broad array of
indexes rose in March, including medical care, used cars and trucks, apparel,
new vehicles, household furnishings and operations, and recreation. The index
for airline fares, in contrast, declined for the fourth time in the last five
months.
The
all items index declined 0.1% for the 12 months ending March. The energy index
declined 18.3% during that time span, more than offsetting increases in the
indexes for food (up 2.3%) and all items less food and energy (up 1.8%).
The
seasonally adjusted Producer
Price Index for final demand (PPI) increased 0.2% in March. Final demand
prices moved down 0.5% in February and 0.8% in January. On an unadjusted basis,
the index for final demand decreased 0.8% for the 12 months ended in March.
In
March, more than half of the rise in final demand prices can be attributed to a
0.3% advance in the index for final demand goods. Prices for final
demand services moved up 0.1%.
Final
demand goods: The index for final demand
goods moved up 0.3% in March (+0.2% expected)
following eight consecutive decreases. A major factor in the advance was prices
for final demand energy, which rose 1.5%. The index for final demand goods less
foods and energy increased 0.2% in March. In contrast, prices for final demand
foods fell 0.8%.
Product
detail: Leading the March advance in
prices for final demand goods, the index for gasoline jumped 7.2%. Prices for
motor vehicles, jet fuel, pharmaceutical preparations, basic organic chemicals,
and beef and veal also moved higher. Conversely, the index for pork declined
5.1%. Prices for utility natural gas and for plastic resins and materials also
fell.
Final
demand services: The index for final
demand services inched up 0.1% in March following a 0.5% decrease in February.
The advance can be traced to prices for final demand services less trade,
transportation, and warehousing, which rose 0.3%. In contrast, the indexes for
final demand transportation and warehousing services and for final demand trade
services both declined 0.2% in March. (Trade indexes measure changes in margins
received by wholesalers and retailers.)
Product
detail: Over 60% of the March increase
in the index for final demand services can be attributed to prices for portfolio
management, which jumped 4.1%. The indexes for loan services (partial), food
wholesaling, wireless telecommunication services, and gaming receipts (partial)
also moved higher. Conversely, margins for machinery, equipment, parts, and
supplies wholesaling decreased 0.7%. The indexes for apparel, jewelry,
footwear, and accessories retailing; physician care; and rail transportation of
freight and mail also declined.
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The
price indexes we track were mixed on both month-over-month and year-over-year bases
in March. Only Intermediate Materials increased from February to March.
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The foregoing comments represent the
general economic views and analysis of Delphi
Advisors, and are provided solely for the purpose of information, instruction
and discourse. They do not constitute a solicitation or recommendation regarding
any investment.
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