Producer Price Index for February 2022

 

The Producer Price Index as released by the BLS, this A.M. 

The Producer Price Index for final demand increased 0.8 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This rise followed advances of 1.2 percent in January and 0.4 percent in December 2021. On an unadjusted basis, final demand prices moved up 10.0 percent for the 12 months ended in February.

In February, the advance in the index for final demand can be attributed to prices for final demand goods, which rose 2.4 percent. The index for final demand services was unchanged. 

The upward track continues, although many areas within the stages are starting to slip behind. Unfortunately the Energy and Food sectors are not among that slippage. 

Energy as in crude oil has slipped back from the $130+ range of a week ago and are now in the $105 range. The national gasoline average soared to $4.35 on March 10th and is tailing off ever so slightly to $4.31 at this point. In theory, the price should fall to $3.95 range over the next 2 weeks. 

However, while gasoline stocks are in the somewhat normal range for this time of year, the upstream crude stocks are below, as well as distillate stocks. Which points to a possible imbalance in crude grades for feedstock, which would point to higher refining costs, or so it would seem to this hillbilly.

In any case, demand will likely pick up going into the summer driving season. Supply v demand.

As for food, beef input costs aren't ramping up as much as other meats, but once again... grilling season is upon us. As for Pork... input costs are running about 25% higher than this time last year. Poultry is even higher. Feed and nutrients are the main drivers, with a potential bird flu outbreak causing some concern. 

The feed issue is being hammered by poor crop conditions over the past couple of years and some of the biggest producers are hampered by bad weather. As some of the exporters have been reducing exports, big importers have gone on a buying binge. 

Then came the invasion. Although you may hear something different in the months ahead. Just sayin...

Tomorrow is retail sales, which will require cutting through a ton of revisions, imo.