Producer Price Index News Release

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The latest Producer Price Index news release (http://www.bls.gov/news.release/pdf/ppi.pdf) was issued today by the Bureau of Labor Statistics. Highlights are below.
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The Producer Price Index for finished goods increased 1.6 percent in February, seasonally adjusted. This rise followed advances of 0.8 percent in January and 0.9 percent in December. The index for finished goods less foods and energy rose 0.2 percent.

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Producer Price Index

Getting away from housing (or, at least, from direct exposure to housing), we turn to the Producer Price Index. This is, of course, the change in costs incurred by producers. It isn't a direct measure of inflation - not the way that CPI or the GDP price index are - but manufacturing costs get passed along eventually. Producers want to make money, after all.

Anyway, January was a little disappointing. PPI for finished goods rose 0.8%, and "core" PPI for finished goods[1] rose 0.3%. PPI for intermediate goods rose 1.7%, and PPI for crude goods rose 8.8%. For February, the Econoday-surveyed analysts are looking for improvement in the rate of change; they're calling for a 0.7% increase in PPI for finished goods and a 0.2% increase in "core" PPI for finished goods.

We go to the US Bureau of Labor Statistics for the actual report. PPI for finished goods substantially missed expectations, increasing 1.6% in February, with core PPI increasing 0.2%. PPI for finished food[2] increased 3.9%, while PPI for finished energy[3] increased 3.3%. PPI for intermediate goods increased 2.0%, and PPI for crude goods increased 3.4%.

[1] "Core", when dealing with any measure of inflation, currently means "stripped of energy and food costs". The rationale is that this removes volatility from the measure. Historically, though, what is and is not considered "core" has varied with what is and is not volatile. Ultimately, it's an accounting technique designed to make inflation look better on paper than it does on the bottom line.

[2] Finished food is the stuff you buy in the grocery store.

[3] Finished energy is things like residential electricity, home heating oil, and gasoline.

Producer Price Index News Release

---------------------------------------------------------------------------
The latest Producer Price Index news release (http://www.bls.gov/news.release/pdf/ppi.pdf) was issued today by the Bureau of Labor Statistics. Highlights are below.
---------------------------------------------------------------------------

The Producer Price Index for finished goods rose 0.8 percent in January, seasonally adjusted. This advance followed increases of 0.9 percent in December and 0.7 percent in November. The index for finished goods less foods and energy moved up 0.5 percent.

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News releases archives: http://www.bls.gov/schedule/archives/all_nr.htm
To subscribe or unsubscribe to BLS news releases please visit http://www.bls.gov/bls/list.htm
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Morning Economic Data With 100% Less Showtunes

Let's start off with the Mortgage Bankers' Association Weekly Application Survey which, if you remember, wasn't all that great last week. The composite index fell 5.5%, the purchase index fell 1.4%, and the refinance index fell 7.7%. Now, this index isn't an eagerly awaited one - at best, it is a leading indicator for new home sales and existing home sales - so we have no particular analyst expectations for it. So I won't even attempt to keep you in suspense. The figures for the week ending February 11 were even worse. The composite index fell a seasonally adjusted 9.5%, the purchase index fell a seasonally adjusted 5.9%, and the refinance index fell a seasonally adjusted 11.4%. On the other hand, the average interest rate for 30-year fixed-rate mortgages fell. Granted, it fell a whopping 1 basis point to 5.12%, but you take your wins where you can.

Nevertheless, based on the results of this survey, we look to be on track for a decrease in new and existing home sales for February. And nobody likes that.

On the subject of home sales, let's turn to the US Census Bureau and the US Department of Housing and Urban Development, for New Residential Construction figures. December had a revised 520,000 housing starts (down from the original estimate of 529,000 starts), and the analysts are looking for 540,000 new homes to begin construction in January. And the survey says? Well, the survey says that January had a seasonally adjusted 596,000 new homes begin construction. Of that, 413,000 were single-family homes and 171,000 were buildings with five or more units. Additionally, 562,000 residential building permits were issued and 512,000 residential buildings were completed.

Next on the agenda? The Producer Price Index.December saw it increase 1.1% (or only 0.2% if you restrain yourself to the core PPI). For January, analysts are expecting a 0.7% increase (with the core holding firm at a 0.2% increase). Turning to the Bureau of Labor Statistics, we learn the following from the latest report:

1. December PPI was adjusted downward to 0.9%
2. January PPI for finished goods rose 0.8%, missing expectations but not by an enormous amount.
3. January core PPI for finished goods rose 0.3%, also missing expectation.
4. January PPI for intermediate goods rose 1.7%.
5. January PPI for crude goods rose 8.8%.

And what does this tell us? This tells us that the finished goods PPI will most likely be increasing substantially over the next few months. You can't have the cost to produce crude goods increase heavily without those costs getting passed along the production chain. Also, it implies that CPI will be increasing in the next few months. So while the Street may not be too concerned about the figures today, they will be looking towards future figures with concern.

Unless I'm missing something important, which is possible.

PPI, Retail Sales, And Upper Respiratory Tract Infections

I've been terribly sick - upper respiratory tract infection. There is no joy in the Great Redoubt right now.

The Producer Price Index and the November Retail Sales figures are out right now - have been for a few hours, in point of fact.

October saw the PPI up 0.4% (far better than the expected 0.8%), with "core" PPI declining 0.6%. For November, analysts were expecting a 0.7% increase in PPI, with a 0.3% increase in the core. Retail sales were surprisingly strong last month as well, showing 1.2% increase; analysts weren't that optimistic about November, and called for only a 0.6% improvement.

If you've been paying attention the news, and not to a horrible hacking cough, you already know how all of this came down. But what the heck, let's have a look anyway.

The official word on November PPI is a 0.8% increase in overall finished goods PPI, with a 0.3% increase in "core" PPI. The PPI increased 1.0% for finished foods (rising on eggs, fresh fruits, and melons) and 2.1% for finished energy (mostly on gasoline prices). Meanwhile, retail sales were up 0.8% overall.

At 2:15 PM EST, look for the FOMC to announce that they are concerned about current economic conditions, and that they are holding the Fed Funds target rate to between 0 and 25 bps. One of the Fed Bank Chairmen will probably vote in opposition.

No witty commentary today. Sick.

Producer Price Index News Release

---------------------------------------------------------------------------
The latest Producer Price Index news release
(http://www.bls.gov/news.release/pdf/ppi.pdf)
was issued today by the Bureau of Labor Statistics. Highlights are below.
---------------------------------------------------------------------------

The Producer Price Index for Finished Goods increased 0.4 percent in October, seasonally
adjusted. This advance followed a 0.4-percent rise in both September and August. The index for
finished goods less foods and energy decreased 0.6 percent.

-------------------------------------------------------------------------
News releases archives:
http://www.bls.gov/schedule/archives/all_nr.htm
To subscribe or unsubscribe to BLS news releases
please visit http://www.bls.gov/bls/list.htm
For help, email news_service@bls.gov
-------------------------------------------------------------------------

Producer Price Index

And now, the moment you've all been waiting for...

No. Steve Jobs didn't jump the gun on the Apple announcement. It's not that huge. This is not the moment you will never forget.

The Producer Price Index figures are out, and they aren't as massive as the analysts were looking for. Which is a good thing, since big percentage changes represent rising costs, which cut into profits and make investors unhappy. For October, PPI increased only 0.4% (not the 0.8% the analysts were looking for), and "core" PPI actually declined 0.6%.

The implication is that most production costs dropped across the board, while energy and/or food production costs either stayed level or increased. Unfortunately, the BLS hasn't gotten around to posting the information on their Producer Price Indexes page, so it's difficult to say exactly what happened at this moment.

Apple Will Change The World! Oh, and there's some reports due out as well.

First off, Apple Computers (www.apple.com) started promising last night that "Tomorrow is just another day. That you'll never forget." The smart people at the WSJ and Reuters are expecting an announcement that the Beatles discography will be available on iTunes - this is apparently big news (if true) because there has never been a legal way to get electronic copies of any song by the Beatles.

I can't say I'm all that impressed myself, but I've never been a huge fan of the Beatles. And, since AAPL is down $2 or so in premarket trading, I don't think the Street is all that impressed either.

But away with humdrum corporate shilling! We have metrics to review!

First out of the gate is the Producer Price Index (aka PPI), which is a measure of how much the costs to produce goods has changed. If you think of it as manufacturing inflation, you won't be far off the mark. Two different PPI measures really get looked at: overall PPI and core PPI (which looks at the change in costs while excluding the ever-volatile and obviously unimportant food and energy production costs; how much could they really matter, after all).

September saw a month-over-month PPI change of 0.4%, with "core" PPI increasing 0.1%. For October, the analysts are anticipating a 0.8% increase in PPI, with another lone 0.1% increase in the "core" PPI. Obviously, they are expecting food production costs, energy production costs, or both to spike.

At 9 AM we get Industrial Production. This is a measure of, well, how much our industries produce as an increase or decrease from the previous month. It also looks at something called the capacity utilization rate, which measures how much of the possible productivity of our industries is actually being used. September saw a 0.2% decrease in month-over-month production, and a capacity utilization rate of 74.7%. For October, the Street is looking for a 0.3% increase in production and a utilization rate of 74.9%.

And then, at 10 AM, we get Apple's official word on what their world-changing announcement is. Remember, you will never forget this day.