The Producer Price Index for final demand edged up 0.1 percent in November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.6 percent in October and 0.2 percent in September. (See table A.) On an unadjusted basis, the final demand index moved up 2.5 percent for the 12 months ended in November.
In November, the rise in the final demand index can be traced to a 0.3-percent increase in prices for final demand services. In contrast, the index for final demand goods decreased 0.4 percent.
The index for final demand less foods, energy, and trade services moved up 0.3 percent in November, the third consecutive increase. For the 12 months ended in November, prices for final demand less foods, energy, and trade services advanced 2.8 percent.
Final Demand
Final demand services: The index for final demand services moved up 0.3 percent in November, the third straight rise. The broad-based November advance was led by a 0.3-percent increase in the index for final demand trade services. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services climbed 1.2 percent, and the index for final demand services less trade, transportation, and warehousing inched up 0.1 percent.
Product detail: Most of the November advance in prices for final demand services can be traced to margins for fuels and lubricants retailing, which jumped 25.9 percent. The indexes for health, beauty, and optical goods retailing; cellular phone and other wireless telecommunications services; airline passenger services; food wholesaling; and truck transportation of freight also moved higher. Conversely, prices for guestroom rental fell 3.5 percent. The indexes for machinery and equipment wholesaling and for portfolio management also declined.
Final demand goods: The index for final demand goods moved down 0.4 percent in November, the largest decrease since falling 0.5 percent in May 2017. The November decline was the result of a 5.0-percent drop in the index for final demand energy. In contrast, prices for final demand goods less foods and energy climbed 0.3 percent, and the index for final demand foods advanced 1.3 percent.
Product detail: Leading the November decrease in the index for final demand goods, gasoline prices dropped 14.0 percent. The indexes for liquefied petroleum gas, electric power, fresh fruits and melons, jet fuel, and primary basic organic chemicals also moved down. Conversely, the index for pharmaceutical preparations rose 1.5 percent. Prices for fresh and dry vegetables and for residential natural gas also increased.
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Dean Popplewell
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