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    Market Data

    September 15, 2017

    BLS: Producer Prices Increase in November

    Written by Peter Wright

    The Producer Price Index of commodities increased by 3.1 percent for the 12 months ended in November, according to data released Thursday by the Bureau of Labor Statistics—the largest advance since the 12 months ending January 2012.

    On Thursday, the BLS released its series of producer price indexes (PPIs) for more than 10,000 goods and materials. (For an explanation of this program, see the end of this piece.) The latest release reported results through November. We run this analysis every three or four months to provide information for subscribers on any changes in the competitive position of steel against other materials and rail vs. truck transportation. The PPI data are helpful in monitoring the price direction of steel and steel products against competing materials and products. As far as we can tell from comparison with known transaction prices, these PPI are a reasonable representation of the real world, though there may be a lag between the BLS reports and spot prices for steel products. We have also concluded that the actual index values of the PPIs of different products cannot be compared with one another because they are developed by different committees within the BLS. We believe this data is useful in comparing the direction of prices in the short and medium term, but not the absolute value.

    Peter Wright

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