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| March Producer Price Data (#1) - Apr. 18, 2006 |
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Summary
The Labor Department reported this morning that the Producer Price Index rose 0.5% during March. This compared with a reported 1.4% decline in February.
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* Earlier this morning, the Labor Department reported that the Producer Price Index rose 0.5% during March, which compared with a 1.4% decline in February.
* March's increase was led by a 1.8% rise in energy prices. Costs in this sector were reported to have fallen 4.7% in February. Considering what has taken place recently with energy prices, one would expect a much worse reported result in this area in the April PPI. Depending, of course, on what new mathematical conventions the Labor Department might discover by to suppress it.
* Also contributing to the PPI's March increase was a 0.5% rise in food prices. This reversed a 2.7% decline in February.
* Excluding food and energy, or the so-called "core" rate, a highly, highly nonsensical measure, in my opinion, the PPI was up 0.1% during March. This compared with a rise of 0.3% in February.
* The consensus estimates for the overall as well as core results were around 0.4% and 0.2%, respectively.
* For the 12 months ended March 2006, the overall PPI stood 3.5% higher than a year earlier. During the 12 months ended March 2005, this figure was +5.0%.
* The 12-month change in the PPI's core rate as of March 2006 was 1.7%, which compared with a 2.6% gain for the 12 months ended March 2005. This comparison will be the cause celebre on Tout TV and in the other venues in the regular propaganda loop.
Tomorrow, the Labor Department will release consumer price data for March. This is the third and last of the government inflation series we follow closely each month (import prices, PPI and CPI), I will publish a more detailed statistical analysis of all three measures. I also will update the "Inflation Watch" graph on the home page of the GRA website.
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