US producer prices for resins rise 2% in Nov, chemicals fall 4.1%

15 December 2011 14:33  [Source: ICIS news]

WASHINGTON (ICIS)--US producer prices for plastic resins and materials rose by 2% in November from October, the Department of Labor said on Thursday, part of an overall but more modest 0.3% gain in wholesale prices for the month.

In contrast, prices at the wholesale or producer level for basic organic chemicals fell by 4.1% in November from October. That decline followed a 2.5% drop in October.

Last month’s 2% increase in wholesale prices for resins was not enough to offset the sharp 3.9% decline seen in October.

Overall, the department’s closely watched producer price index (PPI) for November showed a slight 0.3% advance. 

Although modest, that gain reversed the 0.3% decline in October and put the PPI back on the upward trend that it has followed for most of 2011.

Economists and policymakers at the Federal Reserve Board – the US central bank – see the PPI as a harbinger of possible inflationary pressures at the consumer level.

But the 0.3% gain in November is considered mild, especially when compared with the 1% rise seen in January this year and February’s worrisome 1.5% jump in the PPI.

Since then, the producer price index has generally held in the relatively normal range of 0.3% to 0.7%.

The November PPI gain of 0.3% was in large part attributed to a 1% jump in food products and to a sharp 9.4% advance in wholesale prices for home heating oil.  The latter, however, is a seasonal gain related to the onset of the North American winter season.

With food and energy products backed out of the overall totals, the so-called core index for producer prices rose just barely by 0.1%.

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By: Joe Kamalick
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