Producer Prices rocket

From the ABS today, Producer Prices have jumped in the September quarter:

SEPTEMBER KEY FIGURES

	Jun Qtr 13 to Sep Qtr 13	Sep Qtr 12 to Sep Qtr 13
STAGE OF PRODUCTION	% change	% change
Final demand (excl. exports)	1.3	1.9
Domestic	0.8	1.4
Imports	5.9	6.0
Intermediate demand	1.7	2.4
Domestic	1.1	1.7
Imports	6.8	7.9
Preliminary demand	2.0	2.5
Domestic	1.5	2.0
Imports	5.9	6.7

Stage of Production Final Demand

Stage of Production Final Demand, Quarterly % change

SEPTEMBER KEY POINTS

FINAL DEMAND (EXCL. EXPORTS)

• rose 1.3% in the September quarter 2013.
• mainly due to rises in the prices received for electricity supply; gas supply; and water supply, sewerage and drainage services (+4.8%), petroleum refining and petroleum fuel manufacturing (+10.0%) and electronic equipment manufacturing (+4.8%).
• partly offset by falls in the prices received for other agriculture (-3.4%).
• rose 1.9% through the year to the September quarter 2013.

INTERMEDIATE DEMAND

• rose 1.7% in the September quarter 2013.
• mainly due to rises in the prices received for petroleum refining and petroleum fuel manufacturing (+12.4%), electricity supply; gas supply; and water supply, sewerage and drainage services (+4.1%) and oil and gas extraction (+6.7%).
• partly offset by falls in the prices received for meat and meat product manufacturing (-1.7%).
• rose 2.4% through the year to the September quarter 2013.

PRELIMINARY DEMAND

• rose 2.0% in the September quarter 2013.
• mainly due to rises in the prices received for petroleum refining and petroleum fuel manufacturing (+12.9%), oil and gas extraction (+6.7%) and metal ore mining (+7.6%).
• partly offset by falls in the prices received for meat and meat product manufacturing (-2.4%).
• rose 2.5% through the year to the September quarter 2013.

That has the dollar written all over it, in grubby oil-dipped finger prints. Check out the inflation in imports in the top chart. Given the Aussie has since risen and oil has fallen as global growth prospects have also eroded, we should see this pig pass through the python before it becomes a problem.

However, it does go to show that if Glenn Stevens gets his way, consumption lifts with house prices and the dollar falls, inflation will be pouring into the economy.