Fleet Management

PPI, Leading Economic Index Inch Up

August 20, 2010

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The Producer Price Index for Finished Goods inched up 0.2 percent in July, according to the U.S. Bureau of Labor Statistics.
This marked the first month-to-month gain since March, following a 0.5 percent drop in June and a 0.3 percent slip in May.

The PPI measures changes in prices received by producers of goods and services, such as motor carriers, according to Bob Costello, chief economist of the American Trucking Associations. In his Weekly Economic Recap, Costello said food prices were also up for the first time since March, rising 0.7 percent.

"Despite July's increase, pipeline inflation is still subdued," Costello said. "Compared with a year earlier, the PPI was up 4.1 percent, while the core PPI rose only 1.5 percent."

Core PPI does not include volatile food and energy prices, he said.

For the trucking industry, PPIs rose over last year, but at a slower rate than in June. Truckload PPI was up 1.8 percent from July 2009, after increasing more than 3 percent the previous two months, Costello said. Less-than-truckload PPI was up 0.1 percent year-over-year, down from June's 1 percent increase.

Another economic indicator, the Leading Economic Index, also inched up this week, gaining 0.1 percent in July. This follows a 0.3 percent drop in June, Costello said.

"The latest LEI reading is consistent with our view that the economy will grow sluggishly in the second half of this year," he said.

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