Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  The Producer Price Index Declined 0.2% in May
Posted Under: Data Watch • Government • PPI • Fed Reserve
Supporting Image for Blog Post

 
Implications: One thing for sure: The government's new measure of producer prices, which now includes services, is just as volatile as the old one. Following two months of large gains, producer prices dipped 0.2% in May, led lower by a 0.5% decline in the index for trade services. In the past year, producer prices have increased a moderate 2.0%. But, in the past three months, producer prices are up at a 3.7% annual rate. The acceleration is most prevalent in prices for services, which account for over 60% of the total index. Services prices are up 2.2% in the past year but have climbed at a 4.5% annual rate in the past three months. By contrast, goods are up 1.9% from a year ago and have climbed at a similar 1.8% rate in the past three months. Prices further back in the production pipeline (intermediate demand) are mixed. Prices for processed goods are down over the past three months, both overall and excluding food and energy. Prices for unprocessed goods are up at a 1.2% annual rate in the past three months, a slower pace than the 4.5% increase in the past year. Taken as a whole, the trend in producer price inflation is hovering around 2%. Given loose monetary policy, this trend will likely move higher in the year ahead. If anything, the Federal Reserve should be tapering quantitative easing faster than it already is. The problems that ail the economy are fiscal and regulatory in nature; continuing to add more excess reserves to the banking system is not going to boost economic growth. Loose monetary policy is gaining traction and we expect both real GDP growth and inflation to accelerate in the year ahead.

Click here for PDF version
Posted on Friday, June 13, 2014 @ 10:01 AM • Post Link 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.
Search Posts
 PREVIOUS POSTS
Retail Sales Increased 0.3% in May
The ECB Wants a Free Toaster
Nonfarm Payrolls Increased 217,000 in May
The Trade Deficit in Goods and Services Came in at $47.2 Billion in April
The ISM Non-Manufacturing Index Increased to 56.3 in May
The ISM Manufacturing Index Increased to 55.4 in May
Housing Recovery Still on Track
Despite Drop in GDP, Economy OK
Personal Income Increased 0.3% in April
Real GDP Was Revised to a -1.0% Annual Rate in Q1
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011
Expand 20102010

Search by Topic
Skip Navigation Links.

 
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.
Follow First Trust:  
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 © 2024 All rights reserved.