January 14, 2025

The Producer Price Index (PPI) for final demand in the U.S. increased by 0.2 percent in December on a seasonally adjusted basis, according to the U.S. Bureau of Labor Statistics. Prior to this, final demand prices had increased by 0.4 percent in November and 0.2 percent in October. Over the 12 months ended in December, the index for final demand rose by 3.3 percent on an unadjusted basis, following a 1.1 percent increase in 2023.

In December, a 0.6-percent increase in the index for final demand goods contributed significantly to the rise, while prices for final demand services remained unchanged.

Excluding the volatile categories of foods, energy, and trade services, the index for final demand less foods, energy, and trade services edged up by 0.1 percent in December, the same as in November. Over the 12 months ended in December, prices for final demand less foods, energy, and trade services rose by 3.3 percent, following a 2.7 percent increase in 2023.

Final demand goods

In December, prices for final demand goods rose by 0.6 percent, marking the third consecutive increase. This rise was primarily driven by a 3.5-percent jump in the index for final demand energy. In contrast, prices for final demand foods edged down by 0.1 percent, while the index for final demand goods excluding foods and energy remained unchanged.

On a product level, a 9.7-percent increase in the index for gasoline was a major factor in the rise in prices for final demand goods. Prices for residential electric power, meats, motor vehicles, gas fuels, and fresh fruits and melons also increased. Conversely, the index for fresh and dry vegetables declined by 14.7 percent. Prices for carbon steel scrap and residual fuels also fell.

Final demand services

In December, the index for final demand services remained unchanged after a 0.3 percent increase in November. A 2.2-percent rise in prices for final demand transportation and warehousing services offset declines in the indexes for final demand services less trade, transportation, and warehousing, and for final demand trade services, which fell by 0.2 percent and 0.1 percent, respectively. (Trade indexes measure changes in margins received by wholesalers and retailers.)

On a product level, prices for transportation of passengers (partial) jumped by 7.2 percent in December. The indexes for deposit services (partial), automotive fuels and lubricants retailing, food retailing, and chemicals and allied products wholesaling also increased. Conversely, prices for traveller accommodation services fell by 6.9 percent. The indexes for machinery and vehicle wholesaling, loan services (partial), food wholesaling, and furniture retailing also decreased.

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