Producer Price Index Month-Over-Month April 2020

  • PPI: -1.1%
  • 2020 Goods: -2.8%
  • Services: -0.4%
  • Energy: -17.3% 

Producer Price Index Month-Over-Month February 2021

  • April 2020 PPI: 0.5%
  • April 2020 Goods: 1.4%
  • April 2020 Services: 0.1%
  • Energy: 6.0%

Q: Why does Energy have such a small impact on the PPI?
A: The following chart explains. 

PPI Final Demand Weights 

PPI Final DEmand Percentage Weights 2021-02

Energy is 15.5% of goods but only 5.0% of the overall PPI. 

PPI Year-Over-Year 

PPI Final Demand Year-Over-Year NSA 2021-02

Producer Price Index Year-Over-Year April 2020

  • PPI: -1.5%
  • Goods: -5.2%
  • Services: +0.3%
  • Energy: -30.7%

Producer Price Index Year-Over-Year February 2021

  • PPI: 2.8%
  • Goods: 3.4%
  • Services: 2.5%
  • Energy: 5.5%

What's Going to Happen?

The year-over-year comparisons in March, April, and May are going to show huge percentage year-over-year jumps, especially April and May due to comparisons vs. the initial pandemic numbers in Spring of 2020.

Services will act as a bit of a stabilizer given they constitute 66% of the PPI, but the energy numbers are so huge they will have a very noticeable impact. 

Consumer Price Index Discussion

For the impact of Covid on the CPI, please see Inflation is Poised to Soar, 3% by June is "Almost Certain"

Mish

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