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Producer Price Index rose 0.3% in December, ex Fd & Engy up 0.5%
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The Producer Price Index for final demand increased 0.3 percent in December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This rise followed advances of 0.1 percent in November and 0.3 percent in October. (See table A.) On an unadjusted basis, the final demand index moved up 0.8 percent in 2020, after increasing 1.4 percent in 2019.
In December, the advance in the final demand index can be traced to a 1.1-percent increase in prices for final demand goods. Conversely, the index for final demand services edged down 0.1 percent.
Prices for final demand less foods, energy, and trade services rose 0.4 percent in December, the eighth consecutive advance. In 2020, the index for final demand less foods, energy, and trade services moved up 1.1 percent, following a 1.5-percent increase in 2019.
Final Demand
Final demand goods: The index for final demand goods advanced 1.1 percent in December, the largest increase since moving up 1.5 percent in May. Over 70 percent of the December rise can be traced to prices for final demand energy, which climbed 5.5 percent. The index for final demand goods less foods and energy advanced 0.5 percent. In contrast, prices for final demand foods inched down 0.1 percent.
Product detail: Nearly half of the December increase in the index for final demand goods is attributable to gasoline prices, which jumped 16.1 percent. The indexes for iron and steel, diesel fuel, jet fuel, meats, and home heating oil also moved higher. Conversely, prices for natural cheese (except cottage cheese) fell 10.8 percent. The indexes for electric power and for electronic computers and computer equipment also declined.
Final demand services: The index for final demand services inched down 0.1 percent in December, the first decrease since falling 0.4 percent in April. Leading the December decline, margins for final demand trade services decreased 0.8 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services edged down 0.1 percent. In contrast, the index for final demand services less trade, transportation, and warehousing rose 0.2 percent.
Product detail: Leading the December decrease in the index for final demand services, margins for fuels and lubricants retailing fell 6.6 percent. The indexes for apparel, footwear, and accessories retailing; health, beauty, and optical goods retailing; airline passenger services; and deposit services (partial) also moved lower. Conversely, prices for portfolio management increased 1.7 percent. The indexes for long-distance motor carrying, machinery and equipment parts and supplies wholesaling, and loan services (partial) also advanced.
Posted: January 15, 2021 Friday 08:30 AM