Japan's producer prices fell. The comparison date matters.
Prices fell 0.3% from August but remained 6.8% above last September.
- Monthly decline
- 0.3%
- Annual change
- 6.8%
- September price index
- 135.7
Prices fell. Are they cheaper than last year, too?
The answer depends on the comparison date.
- 01
The monthly decline is real
The overall index fell from 136.1 to 135.7.
It puts prices for goods traded between businesses on a common scale.
This comparison measures the change since August.
- 02
Last September tells a different part of the story
Last September's index was 127.1.
Prices this September remained 6.8% above that level.
A monthly fall and an annual rise can both be true.
- 03
Yet farm, forestry and fishery prices are below last year
With last September set to 100, overall prices reached 106.8.
Agriculture, forestry and fishery prices reached 86.7, down 13.3%.
A higher average does not mean every category rose.
- 04
This does not establish cheaper groceries at home
This release does not establish a change in your household bills.
It measures goods prices between businesses in Japan.
Read a price decline with its comparison attached- Check whether the comparison is monthly or annual
- Check whether prices concern businesses or consumers
- Compare the overall average with the goods you care about
A direction needs a starting point.
Down 0.3% from August, still up 6.8% from last year. Even a decline needs a starting point.
Preliminary figures need another check
September is preliminary; some earlier figures have been revised.
The next report is due on November 12.
Check whether a monthly fall and an annual rise still coexist.
ColumnA falling price still needs a starting pointThe monthly direction and the annual price gap answer different questions. · about 2 minRead the columnClose
Japan's producer prices fell 0.3% in September from August, according to the Bank of Japan. That is a decline in the average price of goods traded between businesses. Prices nevertheless stood 6.8% above the level a year earlier. These statements do not contradict each other. They measure the same destination from different starting points. Reading only the direction leaves out where prices now stand.
The landing place matters
A price index puts a collection of goods on a common scale. The overall index slipped from 136.1 in August to 135.7 in September. Last September's reading was 127.1. The monthly decline therefore did not return the index to its level a year earlier. The useful comparison is between the recent step down and the price gap still left behind. A lower reading does not, by itself, establish a return to an earlier price level.
Give the decline its due
The elevated overall level does not make the latest decline imaginary. The agriculture, forestry and fisheries index fell from 160.5 in August to 146.4 in September. This group made the largest downward contribution to the overall monthly change. The bank lists brown rice, polished rice and pork among the contributing goods. Petroleum and coal products also pulled the overall index down. Electricity, gas and water, along with plastic products, pushed in the other direction. A falling average does not mean every product is getting cheaper.
Keep household bills separate
For households in the United States and elsewhere, this release does not establish cheaper groceries or lower bills. Japanese business prices and the prices consumers pay are different measurements. The reusable habit is to attach the comparison date whenever a headline says prices fell. Then check whether the figure covers business transactions or consumer purchases, and whether individual categories follow the average. September's figures are preliminary, and some earlier readings have been revised. The next report is scheduled for November 12. Check the Bank of Japan's next table for both the monthly direction and the annual price gap.