New Stats on Electric and Gas Prices

Deck: 
January 2017’s stats from the Labor, Energy and Commerce Departments show real electric prices continuing its downward trend
Today in Fortnightly

December 2016's Producer Price Index, and its components, was published by the Labor Department on January 13. 

In the list of final demand, residential electricity was up just 0.6 percent in December, as compared to the prior December. While residential natural gas was up 8.2 percent. 

Overall, final demand goods - from pork to pet foods to pumps - were up 1.9 percent. Final demand services - from lawn equipment retailing to life insurance to legal services - were up 1.5 percent. 

So, the cost to consumers for electricity is increasing slower than general inflation, and for natural gas is increasing faster.

In the list of intermediate demand, commercial electricity was up 1.3 percent, and industrial electricity was up just 0.1 percent. While commercial natural gas was up 8.1 percent, and industrial natural gas was up 6.3 percent.

Overall, processed goods - from plywood to plastic packaging to plumbing fixtures - were up 1.8 percent. Unprocessed goods - from raw milk to raw sugar to raw cotton - were up 13.2 percent. Services for intermediate demand - from paper and plastics retailing to pipeline transportation to passenger car rental - were up 2.5 percent. 

So, the cost to businesses for electricity is increasing slower than general inflation, and for natural gas is increasing faster.

The short-term energy outlook was published by the Energy Department last Tuesday.

Residential electricity decreased 1.1 percent in 2016, as compared to the prior year. A decrease is unusual. It is projected to increase 2.6 percent in 2017, and 2.5 percent in 2018. 

Over the three years of 2015 - 2018, the overall increase is 4.0 percent. That's a compound annual growth rate of only 1.3 percent. 

December's Advance Monthly Sales for Retail and Food Services, and its components, were published by the Commerce Department last Friday. 

The twelve-month total for 2016 was 5.5 trillion dollars, an increase of 3.3 percent, as compared to the prior year. December was 0.6 percent higher than November, seasonally-adjusted, and 4.1 percent higher than December 2015.

This suggests that overall consumer expenditures are increasing at a relatively rapid rate. If that's true, electricity as a percent of consumer expenditures may fall to another all-time low.

 

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