Tuesday, April 14, 2009

PPI and Retail Sales Down

The Bureau of Labor Statistics reported that the Producer Price Index (PPI) for finished goods fell 1.2 percent in March (0.0 excluding energy and food): that is 3.5 percent below a year ago. PPI for intermediate goods fell 1.3 percent and for crude goods .3 percent.

The Commerce Department announced Retail and Food Sales fell 1.1 percent in nominal terms. Autos and auto parts lead the decline with a 2.3 percent decline. Note this is in nominal terms. If consumer prices also fell this would reduce the decline in real terms.

Since the number of cars sold in March rose, there must have been a substantial fall in some combination of the prices or the richness of the mix of cars to produce the decline in dollars spent on cars and parts. Retail Sales of automobiles and light trucks and automotive parts were down 2.3 percent based on an 8.5 percent increase in vehicle sales offset by a 9.7 percent fall in dollars spent per vehicle sold.

This could provide a nice bottom for the recession trough.

1 comment:

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