13 July 2012 14:54 [Source: ICIS news]
Correction: In the ICIS story headlined “US wholesale prices for chemicals and plastics sink in June” dated 13 July 2012, please read in the third paragraph … April had seen … instead of … March had seen …. A corrected story follows.WASHINGTON (ICIS)--US wholesale prices for organic chemicals and plastic resins fell sharply in June from May, the Labor Department said on Friday, while the overall index for producer prices inched up by 0.1%.
In its monthly report, the department said that organic chemical prices dropped by 4.2% last month and followed a 2.1% drop in May.
April had seen a 1.6% rise in chemical prices at the producer level, also known as wholesale prices.
In plastics, wholesale prices were off by 2.6% in June from May, more than offsetting the 0.6% gain seen in May and April’s narrow 0.1% increase.
The slim 0.1% increase in wholesale prices overall was driven by a 0.5% gain in producer prices for consumer foods. A 1.4% increase in wholesale prices for light duty trucks and a 0.9% advance for household appliances were prime movers in the consumer products category.
Those gains were to some extent offset by a 0.9% drop in wholesale prices for energy products, such as gasolines and electricity. The fall-off in energy products pricing in June marked the fourth straight month of declines.
With data on energy and food products backed out of the overall producer prices figures, the department said that its so-called “core index” for wholesale prices rose by 0.2% in June, the fourth consecutive monthly gain.
The core index is viewed as a more reliable indicator of potential pricing pressure at the downstream retail stage because fuel and food prices often fluctuate widely at the producer level.
While the overall 0.1% gain in the department’s producer price index (PPI) was minuscule, it ended a three-month decline in the PPI which began in March.
Economists are likely to see some significance in the 0.2% advance in the core index, especially the 0.5% gain in wholesale prices for consumer goods. That gain at the producer level could presage retail price increases.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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