PPI Unexpectedly Fell 0.1% in Feb., Led by Drop in Services
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The Producer Price Index for final demand fell 0.1 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This decline followed advances of 0.2 percent in January and 0.1 percent in December. On an unadjusted basis, the index for final demand moved up 0.9 percent for the 12 months ended in February, the smallest 12-month rise since a 0.9-percent increase in May 2013.
In February, the 0.1-percent decrease in final demand prices can be traced to the index for final demand services, which fell 0.3 percent. In contrast, prices for final demand goods advanced 0.4 percent.
Within intermediate demand, the index for processed goods climbed 0.7 percent, prices for unprocessed goods jumped 5.7 percent, and the index for services rose 0.2 percent.
Final Demand
(Final demand includes goods, services, and construction which are sold for personal consumption, capital investment, government purchases, and export. See table 4 for product detail.)
Final demand services: The index for final demand services moved down 0.3 percent in February, the largest decrease since a 0.4-percent decline in May 2013. Most of the February drop can be traced to margins for final demand trade services, which fell 1.0 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services declined 0.2 percent. Conversely, the index for final demand services less trade, transportation, and warehousing inched up 0.1 percent in February.
Product detail: Over 80 percent of the February decrease in the index for final demand services can be attributed to margins for apparel, footwear, and accessories retailing, which fell 9.3 percent. The indexes for airline passenger services; machinery, equipment, and related parts and supplies wholesaling; food and alcohol retailing; automotive fuels and lubricants retailing; and brokerage compensation for residential property transactions also declined. In contrast, the indexes for both inpatient and outpatient hospital care; health, beauty care, and optical goods retailing; and the U.S. Postal Service moved higher in February. (See table 4.)
Final demand goods: Prices for final demand goods climbed 0.4 percent in February, the same rate of advance as in each of the prior two months. Leading the broad-based increase in February, the index for final demand goods less foods and energy rose 0.2 percent. Prices for final demand foods and final demand energy also moved higher, 0.6 percent and 0.5 percent, respectively.
Product detail: A major factor in the February advance in the index for final demand goods was prices for pharmaceutical preparations, which rose 0.9 percent. The indexes for dairy products, residential natural gas, liquefied petroleum gas, soft drinks, and eggs for fresh use also increased. Conversely, gasoline prices fell 1.1 percent in February. The indexes for processed poultry and for soaps and detergents also decreased.
Special grouping, Final demand less foods, energy, and trade: Prices for final demand less foods, energy, and trade services inched up 0.1 percent in February following advances of 0.1 percent in January and 0.3 percent in December. (The index for final demand less foods, energy, and trade services represents about two-thirds of final demand.)
Special grouping, Finished goods: The index for finished goods increased 0.4 percent in February. (The finished goods index, which excludes the weight for government purchases and exports, represents about two-thirds of final demand goods. The finished goods index represents about one-quarter of overall final demand.) In February, the broad-based advance was led by the index for finished consumer foods, which climbed 0.7 percent. Prices for finished consumer energy goods and for finished goods less foods and energy increased 0.5 percent and 0.1 percent, respectively. Within finished goods, higher prices for dairy products, residential natural gas, liquefied petroleum gas, pharmaceutical preparations, soft drinks, and eggs for fresh use outweighed lower prices for gasoline, processed poultry, and soaps and detergents.
The full report cane be seen here.
In February, the 0.1-percent decrease in final demand prices can be traced to the index for final demand services, which fell 0.3 percent. In contrast, prices for final demand goods advanced 0.4 percent.
Within intermediate demand, the index for processed goods climbed 0.7 percent, prices for unprocessed goods jumped 5.7 percent, and the index for services rose 0.2 percent.
Final Demand
(Final demand includes goods, services, and construction which are sold for personal consumption, capital investment, government purchases, and export. See table 4 for product detail.)
Final demand services: The index for final demand services moved down 0.3 percent in February, the largest decrease since a 0.4-percent decline in May 2013. Most of the February drop can be traced to margins for final demand trade services, which fell 1.0 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services declined 0.2 percent. Conversely, the index for final demand services less trade, transportation, and warehousing inched up 0.1 percent in February.
Product detail: Over 80 percent of the February decrease in the index for final demand services can be attributed to margins for apparel, footwear, and accessories retailing, which fell 9.3 percent. The indexes for airline passenger services; machinery, equipment, and related parts and supplies wholesaling; food and alcohol retailing; automotive fuels and lubricants retailing; and brokerage compensation for residential property transactions also declined. In contrast, the indexes for both inpatient and outpatient hospital care; health, beauty care, and optical goods retailing; and the U.S. Postal Service moved higher in February. (See table 4.)
Final demand goods: Prices for final demand goods climbed 0.4 percent in February, the same rate of advance as in each of the prior two months. Leading the broad-based increase in February, the index for final demand goods less foods and energy rose 0.2 percent. Prices for final demand foods and final demand energy also moved higher, 0.6 percent and 0.5 percent, respectively.
Product detail: A major factor in the February advance in the index for final demand goods was prices for pharmaceutical preparations, which rose 0.9 percent. The indexes for dairy products, residential natural gas, liquefied petroleum gas, soft drinks, and eggs for fresh use also increased. Conversely, gasoline prices fell 1.1 percent in February. The indexes for processed poultry and for soaps and detergents also decreased.
Special grouping, Final demand less foods, energy, and trade: Prices for final demand less foods, energy, and trade services inched up 0.1 percent in February following advances of 0.1 percent in January and 0.3 percent in December. (The index for final demand less foods, energy, and trade services represents about two-thirds of final demand.)
Special grouping, Finished goods: The index for finished goods increased 0.4 percent in February. (The finished goods index, which excludes the weight for government purchases and exports, represents about two-thirds of final demand goods. The finished goods index represents about one-quarter of overall final demand.) In February, the broad-based advance was led by the index for finished consumer foods, which climbed 0.7 percent. Prices for finished consumer energy goods and for finished goods less foods and energy increased 0.5 percent and 0.1 percent, respectively. Within finished goods, higher prices for dairy products, residential natural gas, liquefied petroleum gas, pharmaceutical preparations, soft drinks, and eggs for fresh use outweighed lower prices for gasoline, processed poultry, and soaps and detergents.
The full report cane be seen here.
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