PPI and Retail Sales Fall

123jump.com Staff
30 Nov, -0001
New York City

Fall in energy prices were reflected in Producers Price Index and Retail sales for the month of May. In annual terms the wholesale prices were up 3.5% lower than 4.8% reported in April. In the coming months food and energy price movements are key. Shipments of materials such as glass, steel and aluminum declined in the month of May.

The Producer Price Index for Finished Goods fell 0.6 percent in May, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This decline followed a 0.6-percent increase in April and a 0.7-percent advance in March. At the earlier stages of processing, prices received by manufacturers of intermediate goods decreased 0.7 percent in May, after rising 0.8 percent in the preceding month, while the crude goods index moved down 2.0 percent, following a 2.7-percent jump in April.

Over three fourths of the downturn in the finished goods index can be traced to prices for energy goods, which fell 3.5 percent in May after posting a 2.1-percent increase in April. Prices for finished consumer foods also turned down -- declining 0.3 percent following a 0.1-percent advance in the prior month. The index for finished goods other than foods and energy went up 0.1 percent in May, compared with a 0.3-percent gain in April.

Prices for materials for durable manufacturing fell 1.4 percent in May, after showing no change in April. The index for hot rolled steel sheet and strip declined 8.4 percent, following a 1.1-percent decline in the previous month.

Prices for aluminum mill shapes, cold rolled steel sheet and strip, and unprocessed filament yarns increased less than they did in the prior month. The flat glass and original equipment automotive stamping indexes turned down compared with increases in April.

By contrast, the index for semi-finished steel mill products rose 0.1 percent, after dropping 10.3 percent in April. The hot rolled steel bars, plates, and structural shapes; cold finished steel bars; copper and brass mill shapes; and hardwood lumber indexes also moved up in May, after falling in the prior month.

Prices for intermediate foods and feeds advanced 0.4 percent in May, after posting a 0.4-percent rise in April. In May, increasing prices for beef and veal, prepared animal feeds, fluid milk products, and flour out-weighed decreasing prices for natural, processed, and imitation cheese; shortening and cooking oils; refined sugar and byproducts; processed young chickens; confectionery materials; liquid milk products; and butter.

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for May, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $343.6 billion, a decrease of 0.5 percent from the previous month, but up 6.4 percent from May 2004.

Total sales for the March through May 2005 period were up 7.1 percent from the same period a year ago. The March to April 2005 percent change was revised from +1.4 percent to +1.5 percent.

Retail trade sales were down 0.5 percent from April, but were up 6.3 percent above last year. Gasoline station sales were up 13.4 percent from May 2004 and sales of non-store retailers were up 11.9 percent from last year.

Retail stocks are trading higher on the back of this news. Shares of Best Buy, Circuit City, J C Penney, Wal-Mart, Target, Home Depot and other are trading higher.