U.S Producer Price Indexes – July 2018

The Producer Price Index for final demand was unchanged in July, seasonally adjusted, the U.S.
Bureau of Labor Statistics reported today. Final demand prices advanced 0.3 percent in June and
0.5 percent in May. (See table A.) On an unadjusted basis, the final demand index increased 3.3
percent for the 12 months ended in July.

In July, a 0.1-percent rise in the index for final demand goods offset a 0.1-percent decline in
prices for final demand services.

The index for final demand less foods, energy, and trade services moved up 0.3 percent in July,
the same as in June. For the 12 months ended in July, prices for final demand less foods, energy,
and trade services climbed 2.8 percent.

Final Demand

Final demand goods: The index for final demand goods inched up 0.1 percent in July, the same as
in June. The July advance in prices for final demand goods can be traced to a 0.3-percent rise in the
index for final demand goods less foods and energy. In contrast, prices for final demand energy fell
0.5 percent, and the index for final demand foods decreased 0.1 percent.

Product detail: In July, a major factor in the increase in prices for final demand goods was the index
for pharmaceutical preparations, which rose 0.7 percent. Prices for eggs for fresh use, fresh fruits and
melons, motor vehicles, and liquefied petroleum gas also moved higher. Conversely, the electric
power index fell 1.6 percent. Prices for meats; hay, hayseeds, and oilseeds; and nonferrous scrap also
decreased. (See table 4.)

Final demand services: Prices for final demand services edged down 0.1 percent in July, the first
decline since falling 0.2 percent in December 2017. The July decrease is attributable to the index for
final demand trade services, which moved down 0.8 percent. (Trade indexes measure changes in
margins received by wholesalers and retailers.) In contrast, prices for final demand services less
trade, transportation, and warehousing and the index for final demand transportation and
warehousing services advanced 0.3 percent.

Product detail: Leading the July decline in prices for final demand services, margins for fuels and
lubricants retailing dropped 12.7 percent. The indexes for machinery and equipment parts and
supplies wholesaling, food retailing, hospital outpatient care, and airline passenger services also
moved lower. Conversely, prices for guestroom rental climbed 3.9 percent. The indexes for apparel,
jewelry, footwear, and accessories retailing; inpatient care; and truck transportation of freight also
increased.

U.S Bureau of Labor statistics

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell