Wholesale Inflation Rises More Than Expected Led By Surge In Energy

gasoline gas station

No deflation here.

The PPI rose 1.8% compared to .6%, though core inflation of .5% was more subdued

Here’s the full release from the BLS.

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The Producer Price Index for Finished Goods rose 1.8 per cent in November, seasonally adjusted,
the U.S. Bureau of labour Statistics reported today. This increase followed a 0.3-per cent advance
in October and a 0.6-per cent decrease in September. In November, at the earlier stages of
processing, prices received by manufacturers of intermediate goods climbed 1.4 per cent, and the
crude goods index rose 5.7 per cent. On an unadjusted basis, prices for finished goods moved up
2.4 per cent for the 12 months ended November 2009, their first 12-month increase since
November 2008. (See table A.)

Finished goods

About three-fourths of the November advance in the finished goods index can be traced to
higher prices for energy goods, which jumped 6.9 per cent. The indexes for finished goods less
foods and energy and for finished consumer foods also contributed to the finished goods
increase, both rising 0.5 per cent.

Finished energy:  The index for finished energy goods climbed 6.9 per cent in November after
advancing 1.6 per cent a month earlier. About 60 per cent of the broad-based November rise can
be attributed to a 14.2-per cent surge in gasoline prices. Increases in the indexes for liquefied
petroleum gas and home heating oil also were major factors in the finished energy goods
advance. (See table 2.)

Finished core:  The index for finished goods less foods and energy moved up 0.5 per cent in
November, its largest increase since a 0.5-per cent gain in October 2008. Leading the November
advance, the index for light motor trucks jumped 4.2 per cent. Higher cigarette prices also
contributed to the rise in the finished core index.

Finished foods:  The index for finished consumer foods advanced 0.5 per cent in November, its
second consecutive monthly increase. Over 60 per cent of the November rise can be traced to
higher prices for fresh and dry vegetables, which climbed 8.7 per cent.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components rose 1.4 per cent
in November, its fourth straight monthly advance. Accounting for about three-fourths of the
broad-based November increase, prices for intermediate energy goods climbed 5.4 per cent. The
indexes for both intermediate goods less foods and energy and for intermediate foods and feeds
also contributed to this advance, rising 0.3 and 0.7 per cent, respectively. On a 12-month basis,
prices for intermediate goods fell 1.6 per cent in November. This is the fourth consecutive month
of slowing year-over-year declines following a record 15.2-per cent drop for the 12 months ended
July 2009. (See table B.) 

Intermediate energy:  The index for intermediate energy goods rose 5.4 per cent in November,
its second consecutive monthly increase. A major factor in the November advance was an 18.8-
per cent surge in jet fuel prices. The indexes for gasoline and liquefied petroleum gas also
contributed significantly to higher intermediate energy goods prices. (See table 2).

Intermediate core:  Prices for intermediate materials less foods and energy increased 0.3 per cent
in November, their fifth increase in the last six months. The index for basic organic chemicals led
the November advance, rising 4.3 per cent. Higher prices for medicinal and botanical chemicals
also were a factor in the intermediate core increase.

Intermediate foods:  The index for intermediate foods and feeds moved up 0.7 per cent in
November following two consecutive monthly declines. About 40 per cent of this advance can
be attributed to prices for pork, which climbed 6.4 per cent.

Crude goods

The Producer Price Index for Crude Materials for Further Processing increased 5.7 per cent in
November. For the 3-month period ending in November, crude material prices rose 9.1 per cent
after advancing 4.4 per cent in the 3 months ending in August. In November, monthly increases
of 12.2 per cent in the index for crude energy materials and 2.6 per cent for prices of crude
foodstuffs and feedstuffs outweighed a 0.8-per cent decrease in the index for crude nonfood
materials less energy. (See table B.)

Crude energy:  The index for crude energy materials increased 12.2 per cent in November. From
August to November, this index rose 15.0 per cent compared with a 12.6-per cent rise in the 3
months ending in August. Accounting for about two-thirds of the monthly November increase,
the index for natural gas jumped 25.5 per cent. Higher prices for both crude petroleum and coal
also contributed to the advance in the crude energy materials index. (See table 2.)

Crude foods:  Prices for crude foodstuffs and feedstuffs rose 2.6 per cent in November. This
index moved up 5.8 per cent in the most recent 3-month period compared with a 7.1-per cent
decline in the previous 3-month period. In November, over 60 per cent of the monthly increase
in the crude foods index can be attributed to a 25.6-per cent surge in prices for slaughter hogs. An
advance in the fluid milk index also was a significant factor in the rise for crude foodstuffs and
feedstuffs.

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