November Producer Price Index: Core Final Demand Up 0.3% MoM

Today's release of the November Producer Price Index (PPI) for Final Demand came in at 0.1% month-over-month seasonally adjusted, down from last month's 0.6%. It is at 2.5% year-over-year, down from 2.9% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) came in at 0.3% MoM, down from 0.5% the previous month and is up 2.7% YoY NSA. MoM consensus forecasts were for 0.1% headline and 0.1% core.

Here is the summary of the news release on Final Demand:

The Producer Price Index for final demand edged up 0.1 percent in November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.6 percent in October and 0.2 percent in September. (See table A.) On an unadjusted basis, the final demand index moved up 2.5 percent for the 12 months ended in November.

In November, the rise in the final demand index can be traced to a 0.3-percent increase in prices for final demand services. In contrast, the index for final demand goods decreased 0.4 percent. The index for final demand less foods, energy, and trade services moved up 0.3 percent in November, the third consecutive increase. For the 12 months ended in November, prices for final demand less foods, energy, and trade services advanced 2.8 percent. More…

Finished Goods: Headline and Core

The BLS shifted its focus to its new "Final Demand" series in 2014, a shift we support. However, the data for these series are only constructed back to November 2009 for Headline and April 2010 for Core. Since our focus is on longer-term trends, we continue to track the legacy Producer Price Index for Finished Goods, which the BLS also includes in their monthly updates.

As this (older) overlay illustrates, the Final Demand and Finished Goods indexes are highly correlated.

Final Demand vs. Finished Goods

FRED® Graphs ©Federal Reserve Bank of St. Louis. All rights reserved.

(Click on image to enlarge)

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