Yesterday, I discussed the Producer Price Index PPI for Final Demand. Today, let’s look at intermediate stages.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: In July, prices for stage 4 intermediate demand advanced 0.8 percent, the largest rise since jumping 1.0 percent in January 2023. In July, the index for total services inputs to stage 4 intermediate demand increased 1.0 percent, and prices for total goods inputs rose 0.5 percent. Advances in the indexes for portfolio management; securities brokerage, dealing, investment advice, and related services; courier, messenger, and U.S. postal services; food and alcohol wholesaling; meats; and diesel fuel outweighed decreases in prices for natural gas to electric utilities, cherries, and business loans (partial). For the 12 months ended in July, the index for stage 4 intermediate demand moved up 2.6 percent, the largest 12-month increase since rising 2.6 percent in March 2025.

Stage 3 intermediate demand: In July, the index for stage 3 intermediate demand advanced 1.1 percent, the largest increase since moving up 1.2 percent in August 2023. In July, prices for total goods inputs to stage 3 intermediate demand jumped 2.0 percent, and the index for total services inputs rose 0.5 percent. Increases in prices for diesel fuel; raw milk; jet fuel; courier, messenger, and U.S. postal services; slaughter poultry; and livestock outweighed declines in the indexes for freight forwarding, metal coating and allied services, and ungraded chicken eggs. For the 12 months ended in July, prices for stage 3 intermediate demand rose 2.1 percent, the largest 12-month advance since moving up 2.1 percent in February 2025.

Stage 2 intermediate demand: In July, prices for stage 2 intermediate demand advanced 0.5 percent after rising 0.9 percent in June. In July, the index for total goods inputs to stage 2 intermediate demand increased 0.6 percent, and prices for total services inputs moved up 0.4 percent. Advances in the indexes for crude petroleum, food and alcohol wholesaling, nonferrous scrap, data processing and related services, portfolio management, and carbon steel scrap outweighed declining prices for pipeline transportation of energy products, natural gas, and business loans (partial). For the 12 months ended in July, the index for stage 2 intermediate demand fell 0.2 percent.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand increased 1.1 percent in July, the largest advance since rising 1.3 percent in August 2023. In July, the index for total services inputs to stage 1 intermediate demand jumped 1.4 percent, and prices for total goods inputs moved up 0.8 percent. Increases in the indexes for securities brokerage, dealing, investment advice, and related services; diesel fuel; data processing and related services; portfolio management; courier, messenger, and U.S. postal services; and traveler accommodation services outweighed decreasing indexes for natural gas to electric utilities; soybean cake and meal; and building materials, paint, and hardware wholesaling. For the 12 months ended in July, prices for stage 1 intermediate demand advanced 2.5 percent, the largest 12-month rise since moving up 3.8 percent in February 2023.

PPI Intermediate Demand by Category

(Click on image to enlarge)

PPI Intermediate Demand Percent Change Month-Over-Month

• Durable Goods: 1.3 percent
• Manufacturing: 0.4 percent
• Construction: 0.1 percent
• Food Manufacturing: -0.1 percent
• Unprocessed Food and Feed: 2.9 percent

Construction is the only real bright spot because unprocessed food increases will eventually become processed food increases.

Producer Prices for July Unexpectedly Rise the Most Since March 2022

Yesterday, I reported Producer Prices for July Unexpectedly Rise the Most Since March 2022

Month-Over-Month Details

• Final Demand: 0.9 percent
• Final Demand Goods: 0.7 percent
• Final Demand Services: 1.1 percent
• Final Demand Food: 1.4 percent
• Final Demand Less Food and Energy: 0.9 percent

Intermediate goods suggest still more problems are on deck.

Also consider Hoot of the Day: Trump Asks Goldman to Replace Economist Over Tariff Stance

All that can be said is Tariffs have not amounted to much price inflation yet.

That’s starting to change. Producer price increases at the intermediate stage will impact prices for final consumption.

Then the PPI for final consumption will impact the CPI.

Of course, a huge recession and falling demand could disrupt this chain.

More By This Author:

U.S. Debt Now Grows by $1 Trillion Every 150 Days
Producer Prices For July Unexpectedly Rise The Most Since March 2022
The Treasury Secretary Wants To Expand Trump’s Unconstitutional Export Taxes