September 12, 2024
The Producer Price Index (PPI) for final demand in the U.S. increased by 0.2 percent in August on a seasonally adjusted basis, as reported by the U.S. Bureau of Labor Statistics. Final demand prices remained unchanged in July and rose by 0.2 percent in June. Over the 12 months leading up to August, the index for final demand advanced by 1.7 percent on an unadjusted basis.
The August increase in the index for final demand was driven by a 0.4-percent rise in prices for final demand services, while prices for final demand goods remained unchanged.
Excluding the volatile categories of foods, energy, and trade services, the index for final demand less foods, energy, and trade services also increased by 0.3 percent in August, matching the increase seen in July. Over the 12 months ending in August, this core index rose by 3.3 percent.
Final demand goods
In August, prices for final demand goods were unchanged, following a 0.6 percent increase in July. Within the category, the index for final demand goods less foods and energy rose by 0.2 percent, while the index for final demand foods edged up 0.1 percent. However, prices for final demand energy declined by 0.9 percent, offsetting gains in other categories.
On a product level, the index for non-electronic cigarettes rose by 2.3 percent in August. Prices also increased for chicken eggs, gasoline, diesel fuel, and drugs and pharmaceuticals. On the other hand, the index for jet fuel dropped significantly by 10.5 percent, and prices fell for meats, electric power, hay, hayseeds, oilseeds, and nonferrous scrap.
Final demand services
In August, prices for final demand services rose by 0.4 percent, following a 0.3 percent decline in July. About 60 percent of this increase was due to a 0.3 percent rise in the index for final demand services less trade, transportation, and warehousing. Margins for final demand trade services increased by 0.6 percent, while the index for transportation and warehousing services decreased by 0.1 percent.
A 4.8 percent increase in the index for guestroom rental significantly contributed to the rise in prices for final demand services in August. Other notable increases were seen in machinery and vehicle wholesaling, automotive fuels and lubricants retailing, residential real estate loans, professional and commercial equipment wholesaling, and furniture retailing. On the other hand, prices for airline passenger services dropped by 0.8 percent, with decreases also noted in food and alcohol retailing, as well as membership dues, admissions, and recreational facility use fees.
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