Printer Friendly

HUNTINGTON CHIEF ECONOMIST: MAY PPI SPELLS END TO INFLATION SCARE

 COLUMBUS, Ohio, June 11 /PRNewswire/ -- James W. Coons, vice president and chief economist for The Huntington National Bank in Columbus, Ohio, says that flat producer prices in May spell the end to the latest inflation scare.
 The Bureau of Labor Statistics announced this morning that its producer price index (PPI) for finished goods was unchanged from April to May. Economists had expected an increase of 0.2 percent. An acceleration in prices at both producer and consumer levels early this year sparked concerns that inflation was heating up.
 Producer prices fell 0.2 percent in 1991 and rose 1.4 percent in 1992. The annual rate of increase jumped to 4.7 percent in the first four months of 1993. At the same time, the price of gold, which is widely regarded as a gauge of inflation pressures, jumped $50 per ounce. Concerns that these increases were the beginning of a trend pushed short term interest rates higher by more than one-quarter of a percentage point and caused lenders to boost mortgage rates to their highest levels since the winter.
 Coons cites the general downward trend in commodity prices, which react swiftly to changes in inflationary pressures, as evidence that inflation remains subdued. "Spot market prices of raw industrial materials have fallen in recent weeks to a six-year low," said Coons. "In addition, as gold has soared, copper has slumped and oil has traded in a narrow range. It is difficult to conceive of a significant upswing in inflation that is not accompanied by a general and pronounced rise in commodity prices."
 Based on a composite leading index of inflation, which incorporates measures of commodity prices, Coons calculates the probability of a near term upturn in the interest rate cycle to be less than 25 percent. In advance of previous turning points in interest rates, the probability has topped 90 percent.
 -0- 6/11/93
 /CONTACT: Jim Coons of The Huntington National Bank, 614-463-4467/


CO: The Huntington National Bank ST: Ohio IN: FIN SU: ECO

KL -- CL009 -- 1046 06/11/93 11:38 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jun 11, 1993
Words:344
Previous Article:GUPTA TO ANNOUNCE SECOND QUARTER EARNINGS JULY 20
Next Article:VARITY FOUR MILLION COMMON STOCK OFFERING PRICED AT $32.75
Topics:


Related Articles
HUNTINGTON CHIEF ECONOMIST: MAY CPI

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters