| Actual | Previous | Revised | |
|---|---|---|---|
| Month over Month | -0.2% | -0.8% | -0.9% |
| Year over Year | 0.2% | 0.2% | 0.0% |
Highlights
Producer prices in France's home market fell 0.2 percent in June after a 0.9 percent decline the previous month, while increasing 0.2 percent year-on-year, a modest increase from the unchanged reading in May.
Mining, quarrying, energy, and water prices fell 1.8 percent in June after a 3.9 percent drop in May, with the more modest decline attributed to electricity prices falling 4.8 percent in June from a 7.8 percent drop in May. Prices were 3.5 percent lower than a year ago, marking 19 consecutive months of contraction.
Manufactured goods prices rose 0.3 percent, as did those for food, beverages and tobacco, compared to the previous month while transportation equipment rose a modest 0.1 percent.
Prices for coking coal and refined petroleum jumped 5.8 percent in June after declining 0.9 percent in May on the back of higher global oil prices. This was somewhat offset by a stronger Euro. Import prices for coke and petroleum gained 7.9 percent in June after falling 2.5 percent in May. Overall, import prices were 0.5 percent higher in June than in May when they declined 0.6 percent.
Today's result shows there is no imminent threat of pipeline inflation, although there will likely be more volatility around energy prices.
Mining, quarrying, energy, and water prices fell 1.8 percent in June after a 3.9 percent drop in May, with the more modest decline attributed to electricity prices falling 4.8 percent in June from a 7.8 percent drop in May. Prices were 3.5 percent lower than a year ago, marking 19 consecutive months of contraction.
Manufactured goods prices rose 0.3 percent, as did those for food, beverages and tobacco, compared to the previous month while transportation equipment rose a modest 0.1 percent.
Prices for coking coal and refined petroleum jumped 5.8 percent in June after declining 0.9 percent in May on the back of higher global oil prices. This was somewhat offset by a stronger Euro. Import prices for coke and petroleum gained 7.9 percent in June after falling 2.5 percent in May. Overall, import prices were 0.5 percent higher in June than in May when they declined 0.6 percent.
Today's result shows there is no imminent threat of pipeline inflation, although there will likely be more volatility around energy prices.
Definition
The producer price indices (PPI) measure transaction prices, exclusive of VAT, for goods from industrial activities sold on the French market. Construction is excluded. Changes in the index provide a guide to inflation from the point of view of the product's producer/manufacturer and, in contrast to the consumer price index (CPI), excludes VAT and other deductible taxed associated with turnover.
Description
The PPI measures prices at the producer level before they are passed along to consumers. Since the producer price index measures prices of consumer goods and capital equipment, a portion of the inflation at the producer level gets passed through to the consumer price index (CPI).
Because the index of producer prices measures price changes at an early stage in the economic process, it can serve as an indicator of future inflation trends. The producer price index and its sub-indexes are often used in business contracts for the adjustment of recurring payments. They also are used to deflate other values of economic statistics like the production index. It should be noted that the PPI excludes construction.
The PPI provides a key measure of inflation alongside the consumer price indexes and GDP deflators. The output price indexes measure change in manufacturer' goods prices produced and often are referred to as factory gate prices. Input prices are not limited to just those materials used in the final product, but also include what is required by the company in its normal day-to-day operations.
The PPI is considered a precursor of both consumer price inflation and profits. If the prices paid to manufacturers increase, businesses are faced with either charging higher prices or they taking a cut in profits. The ability to pass along price increases depends on the strength and competitiveness of the marketplace.
The bond market rallies when the PPI decreases or posts only small increases, but bond prices fall when the PPI posts larger-than-expected gains. The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.
Because the index of producer prices measures price changes at an early stage in the economic process, it can serve as an indicator of future inflation trends. The producer price index and its sub-indexes are often used in business contracts for the adjustment of recurring payments. They also are used to deflate other values of economic statistics like the production index. It should be noted that the PPI excludes construction.
The PPI provides a key measure of inflation alongside the consumer price indexes and GDP deflators. The output price indexes measure change in manufacturer' goods prices produced and often are referred to as factory gate prices. Input prices are not limited to just those materials used in the final product, but also include what is required by the company in its normal day-to-day operations.
The PPI is considered a precursor of both consumer price inflation and profits. If the prices paid to manufacturers increase, businesses are faced with either charging higher prices or they taking a cut in profits. The ability to pass along price increases depends on the strength and competitiveness of the marketplace.
The bond market rallies when the PPI decreases or posts only small increases, but bond prices fall when the PPI posts larger-than-expected gains. The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.
