November Producer Price Index: Core Final Demand Up 0.2% MoM

This morning's release of the December Producer Price Index (PPI) for Final Demand was at 0.3% month-over-month seasonally adjusted, up from a 0.1% increase last month. It is at 0.8% year-over-year, unchanged from last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) came in at 0.1% MoM, unchanged from the previous month, and is up 1.2% YoY NSA. MoM consensus forecasts were for 0.4% headline and 0.2% core.

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

The Producer Price Index for final demand increased 0.3 percent in December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This rise followed advances of 0.1 percent in November and 0.3 percent in October. (See table A.) On an unadjusted basis, the final demand index moved up 0.8 percent in 2020, after increasing 1.4 percent in 2019.

In December, the advance in the final demand index can be traced to a 1.1-percent increase in prices for final demand goods. Conversely, the index for final demand services edged down 0.1 percent. Prices for final demand less foods, energy, and trade services rose 0.4 percent in December, the eighth consecutive advance. In 2020, the index for final demand less foods, energy, and trade services moved up 1.1 percent, following a 1.5-percent increase in 2019. 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.

1 2
View single page >> |

Disclosure: None.

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.