The Producer Price Index for final demand rose 0.5 percent in May, seasonally adjusted, the U.S.
Bureau of Labor Statistics reported today. Final demand prices advanced 0.1 percent in April and
0.3 percent in March. (See table A.) On an unadjusted basis, the final demand index moved up
3.1 percent for the 12 months ended in May, the largest 12-month increase since climbing 3.1
percent in January 2012.
In May, 60 percent of the rise in the index for final demand is attributable to a 1.0-percent
advance in prices for final demand goods. The index for final demand services moved up 0.3
Prices for final demand less foods, energy, and trade services edged up 0.1 percent in May, the
same as in April. For the 12 months ended in May, the index for final demand less foods, energy,
and trade services climbed 2.6 percent.
Final demand goods: The index for final demand goods moved up 1.0 percent in May, the largest
advance since a 1.1-percent rise in May 2015. In May 2018, over 80 percent of the broad-based
increase in prices for final demand goods can be traced to the index for final demand energy, which
jumped 4.6 percent. Prices for final demand goods less foods and energy and for final demand foods
rose 0.3 percent and 0.1 percent, respectively.
Product detail: Half of the advance in the index for final demand goods is attributable to a 9.8-
percent increase in gasoline prices. The indexes for jet fuel, fresh and dry vegetables, diesel fuel, beef
and veal, and light motor trucks also moved higher. In contrast, prices for chicken eggs fell 31.2
percent. The indexes for residential natural gas and for plastic resins and materials also decreased.
(See table 4.)
Final demand services: Prices for final demand services moved up 0.3 percent in May, the fifth
consecutive rise. In May, 80 percent of the advance in the index for final demand services can be
traced to margins for final demand trade services, which climbed 0.9 percent. (Trade indexes
measure changes in margins received by wholesalers and retailers.) Prices for final demand
transportation and warehousing services increased 0.7 percent. The index for final demand services
less trade, transportation, and warehousing was unchanged.
Product detail: One-third of the May advance in prices for final demand services is attributable to a
1.5-percent rise in margins for machinery, equipment, parts, and supplies wholesaling. The indexes
for chemicals and allied products wholesaling; outpatient care (partial); apparel, footwear, and
accessories retailing; food retailing; and truck transportation of freight also moved higher.
Conversely, prices for guestroom rental fell 4.4 percent. The indexes for fuels and lubricants retailing
and for hospital inpatient care also moved lower.
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