August 11, 2023

In July, the seasonally adjusted Producer Price Index (PPI) for final demand increased by 0.3 percent, as reported by the U.S. Bureau of Labor Statistics. This follows unchanged final demand prices in June and a 0.3 percent decline in May. Over the unadjusted 12-month period ending in July, the index for final demand showed growth of 0.8 percent. The rise in July’s final demand prices was driven by a 0.5 percent increase in the index for final demand services and a 0.1 percent uptick in prices for final demand goods. Notably, the index for final demand, excluding food, energy, and trade services, saw a significant 0.2 percent increase in July—the largest since February’s 0.3 percent rise. Over the 12 months ending in July, prices for final demand excluding these components saw a substantial advance of 2.7 percent.

Final demand services

In July, the index for final demand services experienced a notable increase of 0.5 percent, marking the largest rise since August 2022 when it also increased by 0.5 percent. The upward movement was driven by a widespread growth in prices for various final demand services. Specifically, prices for final demand services, excluding trade, transportation, and warehousing, went up by 0.3 percent. Final demand trade services recorded a 0.7 percent increase in margins, while the index for final demand transportation and warehousing services rose by 0.5 percent. These measurements of trade indexes track changes in margins received by wholesalers and retailers.

Final demand goods

In July, prices for final demand goods showed a slight increase of 0.1 percent, following no change in June. This rise was primarily driven by a 0.5 percent increase in the index for final demand foods. However, prices for final demand goods, excluding foods and energy, remained unchanged, as did prices for final demand energy.

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