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Producer Price Index advanced 0.5% in January, ex Fd & Engy up 0.4%
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The Producer Price Index for final demand advanced 0.5 percent in January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.2 percent in December and declined 0.1 percent in November. (See table A.) On an unadjusted basis, the final demand index increased 2.1 percent for the 12 months ended in January, the largest advance since moving up 2.1 percent for the 12 months ended May 2019.
In January, 90 percent of the increase in the final demand index is attributable to prices for final demand services, which climbed 0.7 percent. The index for final demand goods inched up 0.1 percent.
Prices for final demand less foods, energy, and trade services advanced 0.4 percent in January, the largest increase since a 0.4-percent rise in April 2019. For the 12 months ended in January, the index for final demand less foods, energy, and trade services moved up 1.5 percent.
Final Demand
Final demand services: The index for final demand services climbed 0.7 percent in January, the largest increase since rising 0.7 percent in October 2018. In January, margins for final demand trade services advanced 1.2 percent, and prices for final demand services less trade, transportation, and warehousing moved up 0.6 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) In contrast, the index for final demand transportation and warehousing services fell 1.6 percent.
Product detail: Forty percent of the January increase in the index for final demand services can be traced to margins for apparel, jewelry, footwear, and accessories retailing, which jumped 10.3 percent. The indexes for machinery and vehicle wholesaling; health, beauty, and optical goods retailing; inpatient care; guestroom rental; and portfolio management also moved higher. Conversely, prices for airline passenger services decreased 5.8 percent. The indexes for professional and commercial equipment wholesaling and for wireless telecommunication services also declined.
Final demand goods: Prices for final demand goods inched up 0.1 percent in January, the fourth consecutive rise. Leading the January increase, the index for final demand goods less foods and energy climbed 0.3 percent. Prices for final demand foods advanced 0.2 percent. In contrast, the index for final demand energy fell 0.7 percent.
Product detail: A 13.9-percent rise for prices of iron and steel scrap was a major factor in the January advance in the index for final demand goods. Prices for fresh and dry vegetables; jet fuel; search, detection, navigation, and guidance systems and equipment; and grains also moved higher. Conversely, the gasoline index decreased 1.5 percent. Prices for chicken eggs, diesel fuel, and motor vehicles also declined.
Posted: February 19, 2020 Wednesday 08:30 AM