U.S. Nov. PPI has biggest drop in 31 months
Tuesday, December 20, 2005 1:56:33 PM
WASHINGTON (AFX) - U.S. prices of raw materials and other producers' inputs fell 0.7% in November, the Labor Department reported Tuesday. This is the largest monthly decline since April 2003. Excluding food and energy costs, the core PPI rose 0.1%. The PPI report was tamer than expected
Economists were expecting the PPI to only fall 0.3% and the core rate to rise 0.2%. The PPI had increased 0.7% in October, while the core PPI had fallen 0.3%
The PPI is now up 4.4% in the past 12 months, down from 5.9% last month. The core PPI has risen 1.7% in the past year, down from 1.9% last month
Over the year, inflation is not much worse than last year. For the first 11 months of the year, the PPI is running at a 5.2% annual rate, compared with a 5.1% rate over the same period last year
In fact, the core rate is lower than last year. Core prices have risen 1.8% over the first eleven months of the year, down from a 2.2% rate last year
In November, futher back in the production cycle, crude goods prices fell 1.2% in November but were still up 21% year-on-year. But core crude good prices rose 5.4% in the month
Prices for intermediate goods destined for further processing fell 1.2%, led by a 6.6% drop in energy prices, but were up 8.4% over the past 12 months
The core intermediate PPI rose 0.5% in November
Energy continued to be the story in November. Finished energy prices fell 4.0% in the month, also the largest decline since April 2003. Prices for home heating oil fell 15.5%, while liquefied petroleum gas prices fell 12.2%
Auto prices fell 0.8%, the largest decline in four years. Food prices rose 0.5% as fresh citrus fruit prices jumped 35.2%, the biggest increase since January 1999
This story was supplied by MarketWatch. For further information see www.marketwatch.com
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