21 March 2006, 15:15  U.S. producer prices may fall

In February lower electricity prices should moderate the latest month’s outcome, aided by weaker growth in car and truck prices. Producer prices for finished goods sold by U.S. businesses probably retreated last month. “Given that average oil and natural gas prices decreased, import prices fell by 0.5% mom and the ISM price components were also lower, we expect producer prices (PPI) to have fallen slightly by 0.2% mom (+5.0% yoy) in February,” declared Peter Meister, Economist at BHF-Bank AG. “Core PPI had increased sharply by 0.4% mom in January, partly because of motor vehicle prices. We expect a more moderate increase in core PPI of about 0.2% mom in February, which could nevertheless raise the annual rate slightly to 1.6%.” He added. The January index grew 0.4%, following two monthly increases of 0.1% in both November and December. Compared to the same month a year ago, the January index of core producer price were up 1.5%, down slightly from 1.7% in December.

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