PPI: Behind the Headlines
Whenever the Bureau of Labor Statistics releases the Producer Price Index (PPI) we like to go through the data to see which industries are experiencing better (or worse) than normal pricing power. Sometimes this can lead to insights as to which industries would make better investments. Beginning with the headline, though - once again the core number benefitted from slowing SUV sales. Many economists exclude energy prices because they are too volatile, but now that the volatility has been in one direction so long it is affecting consumer purchasing decisions for other products shouldn’t those be stripped out as well?
But on to the nitty gritty. All charts below are reproduced from the Bureau of Labor Statistics and show the year/year percentage change. Corrugated box prices edged back to 11.1% from last month’s 11.6% but remain at the high end of historic averages, signalling strength for both box makers and the transportation companies that move the boxes.
Industrial gases are (ahem) running out of steam:
Inorganic chemical makers are passing through rising petroleum costs but not much else:
Things seem to be slowing down for pharmaceutical preparation:
We may be selling fewer cars and houses, but apparently we’re still painting them:
Steel prices look like they’re leaping tall buildings in a single bound:
Aluminum looks pretty solid too:
Why isn’t Curtiss Wright (CW - Annual Report) stock doing better when industrial valves (below) have such pricing power?
Ball bearings are once again on a roll:
Farm machinery is running out of gas:
Turbines are generating some juice:
Computer prices are declining less than normal:
Graphic evidence of the decline in car prices:
All of the consolidation in telecom is allowing wireline service providers to raise prices for the first time in years:
Last but not least, hospitals look healthy:
