Producer Price Index Remains Same in July
The Producer Price Index for final demand advanced 0.1% in June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported. Final demand prices moved up 0.1% in May and 0.2% in April. On an unadjusted basis, the final demand index rose 1.7% for the 12 months ended in June, the lowest rate of increase since advancing 1.7% in January 2017.
In June, the rise in final demand prices is attributable to a 0.4% increase in the index for final demand services. Conversely, prices for final demand goods fell 0.4%.
The index for final demand less foods, energy, and trade services was unchanged in June following advances of 0.4% in both April and May. For the 12 months ended in June, prices for final demand less foods, energy, and trade services climbed 2.1%.
The index for final demand services rose 0.4% in June, the largest increase since climbing 0.8% in October 2018. Most of the June advance is attributable to margins for final demand trade services, which moved up 1.3%. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services rose 0.3%, while the index for final demand services less trade, transportation, and warehousing was unchanged.
Over a quarter of the June increase in prices for final demand services can be traced to margins for fuels and lubricants retailing, which jumped 12.2%. The indexes for health, beauty, and optical goods retailing; apparel, footwear, and accessories retailing; machinery, equipment, parts, and supplies wholesaling; loan services (partial); and truck transportation of freight also moved higher. In contrast, prices for traveler accommodation services fell 4.0%. The indexes for jewelry retailing and airline passenger services also declined.
Prices for final demand goods moved down 0.4% in June, the largest decrease since falling 0.6% in January. The June decline is attributable to a 3.1% drop in the index for final demand energy. Conversely, prices for final demand foods climbed 0.6%. The index for final demand goods less foods and energy was unchanged.
Nearly 60% of the June decrease in the index for final demand goods can be traced to a 5.0% decline in prices for gasoline. The indexes for diesel fuel, meats, liquefied petroleum gas, iron and steel scrap, and residual fuels also moved lower. In contrast, corn prices rose 19.9%. The indexes for ethanol and residential electric power also increased.
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