June Producer Price Index for Final Demand and Intermediate Services

MarketWatch 666, R.J.S., June Producer Price Index Sets YoY Records for Final Demand and Intermediate Services; 46 year High for Prices of Intermediate Goods

The seasonally adjusted Producer Price Index (PPI) for final demand rose 1.0% in June, as prices for finished wholesale goods rose 1.2% while margins of final services providers rose 0.8%…that increase followed a May report that the PPI had risen 0.8%, as prices for finished wholesale goods rose 1.5% while margins of final services providers rose 0.6%, an April report that the PPI was 0.6% higher, as prices for both finished wholesale goods and margins of final services providers rose by 0.6%, a now revised March report that has the PPI 0.9% higher, as prices for finished wholesale goods rose 1.5% while margins of final services providers rose 0.5%, and a re-revised February report that now has the PPI 0.7% higher, with prices for finished wholesale goods on average 1.6% higher, while margins of final services providers increased by 0.3%….on an unadjusted basis, producer prices are now a record 7.3% higher than a year ago, up from the recomputed 6.6% year over year increase now indicated for May’s producer prices, while the core producer price index, which excludes food, energy and trade services, rose by 0.5% for the month, and is now 5.5% higher than in June a year ago, up from the 5.3% year over year increase that was shown in May…

As noted, the price index for final demand for goods, aka ‘finished goods’, was 1.2% higher in June, after being 1.5% higher in May, 0.6% higher in April, 1.5% higher in March, 1.6% higher in February, 1.6% higher in January, 0.9% higher in December, 0.4% higher in November, 0.5% higher in October, 0.4% higher in September, 0.4% higher in August, 0.5% higher in July, and 0.4% higher in June of last year, and hence is now up by a record 11.7% from a year ago….the finished goods price index rose 1.2% in June as the price index for wholesale foods rose 0.8%, after rising by 2.6% in May, by 2.1% in April, by 0.5% in March, by 1.4% in February, and by 1.6% in January, and as the price index for wholesale energy goods was 2.1% higher, after it had risen 2.2% in May, fallen by 2.4% in April, risen by 5.9% in March, by 5.8% in February, and by 5.1% in January….meanwhile, the index for final demand for core wholesale goods (excluding food and energy) was 1.0% higher, after it had risen by 1.1% in May, by 1.0% in April, by 0.9% in March, by 0.3% in February and by 0.8% in January….wholesale energy prices averaged 2.1% higher due to a 2.8% increase in wholesale prices for gasoline, a 5.6% increase in wholesale prices for home heating oil, and a 12.1% increase in wholesale prices for LP gas, while the wholesale food price index rose 0.8% on a 5.6% increase in the wholesale price index for beef and veal, a 4.8% increase in the wholesale price index for pork, and a 7.6% increase in wholesale price index for processed turkeys…among core wholesale goods, the wholesale price index for industrial chemicals rose 4.5%, the wholesale price index for iron and steel scrap rose 9.9%, the wholesale price index for truck trailers rose 2.6%, the wholesale price index for transformers and power regulators rose 7.5%, the wholesale price index for sporting and athletic goods rose 3.0%, and the wholesale price index for mobile homes rose 3.6%…

At the same time, the index for final demand for services rose 0.6% in June, after rising 0.6% in May, 0.6% in April, a revised 0.5% in March, a revised 0.3% in February and 1.0% in January, as the index for final demand for trade services rose 2.1%, the index for final demand for transportation and warehousing services rose 0.9%, and the core index for final demand for services less trade, transportation, and warehousing services was 0.3% higher…among trade services, seasonally adjusted margins for automobile retailers rose 17.4%, margins for hardware, building materials, and supplies retailers rose 10.6%, margins for TV, video, and photographic equipment and supplies retailers rose 8.4%, margins for fuels and lubricants retailers rose 4.3%, and margins for RVs, trailers, and campers retailers rose 5.8%, while margins for apparel wholesalers fell 6.0%…among transportation and warehousing services, average margins for air transportation of freight rose 4.3% and margins for airline passenger services rose 2.5%…among the components of the core final demand for services index, the index for application software publishing rose 4.7%, margins for passenger car rental rose 4.4%, the price index for arrangement of cruises and tours rose 4.6%, and the price index for traveler accommodation services rose 3.9%, while margins for gaming receipts (partial) fell 4.2% …

This report also showed the price index for intermediate processed goods rose 1.9% in June, after rising 2.8% in May, 1.6% in April, a revised 3.5% in March, a revised 2.9% in February, and 1.8% in January, 1.4% in December, 0.9% in November, 0.9% in October, 0.6% in September, 0.9% in August, 1.4% in July, and 1.2% in June of last year… the price index for intermediate energy goods rose 0.2% in June, as refinery prices for jet fuel rose 3.7%, refinery prices for gasoline rose 2.8%, producer prices for LP gas rose 12.1%, and producer prices for industrial natural gas rose 4.5%, while producer prices for natural gas to electric utilities fell 18.9%… meanwhile, the price index for intermediate processed foods and feeds rose 1.7%, as the producer price index for meats rose 4.7%, the producer price index for processed poultry rose 6.4%, and the producer price index for refined sugar and byproducts rose 1.8%…at the same time, the core price index for intermediate processed goods less food and energy rose 2.3% as the producer price index for steel mill products rose 6.2%, the producer price index for plywood rose 15.2%, the producer price index for copper and brass mill shapes rose 4.3%, the producer price index for fabricated structural metal products rose 5.9%, the producer price index for nitrogenates rose 9.1%, the producer price index for phosphates rose 8.0%, and the producer price index for building paper and board rose 11.2%…prices for intermediate processed goods are now 22.6% higher than in June a year ago, the largest year over year price increase since the year ended February 1975, but just the seventh increase after 19 consecutive year over year decreases, which had followed 29 months of year over year increases, which had been preceded by 16 months of negative year over year comparisons, as prices for intermediate goods fell every month from July 2015 through March 2016….

Meanwhile, the price index for intermediate unprocessed goods rose 2.6% in June, after rising 8.4% in May, falling 3.8% in April, rising a revised 0.7% in March and a revised 11.9% in February, after rising 5.3% in January, and rising by 2.1% in December, by 6.3% in November, 1.3% in October, 5.2% in September, 4.0% in August, 0.6% in July, and by 5.4% last June….that was as the June price index for crude energy goods rose 5.8% as crude oil prices rose 9.9%, unprocessed natural gas prices rose 1.7%, and coal prices rose 0.7%, while the price index for unprocessed foodstuffs and feedstuffs rose 0.7% on a 7.0% increase in producer prices for slaughter cattle, a 5.6% increase in producer prices for slaughter chickens, a 15.0% increase in producer prices for alfalfa hay, and a 5.5% increase in producer prices for raw milk….at the same time, the index for core raw materials other than food and energy materials rose 0.9%, as the price index for aluminum base scrap rose 10.4%, the price index for recyclable paper rose 13.2%, and the price index for iron and steel scrap rose 9.9%… this raw materials index is now 54.1% higher than a year ago, which is down from the 57.9% year over year increase in May, but just the eighth year over year increase after the annual change on this index had been negative from the beginning of 2019 through October of last year…

Lastly, the price index for services for intermediate demand rose 1.1% in May, after rising 0.8% in May, 0.8% in April, a revised 0.5% in March, a revised 0.3% in February, and rising 1.1% in January, and 0.7% in December 2020, after being unchanged in November, rising 0.7% in October, rising 1.1% in September, 0.8% in August, 0.5% in July, and 0.3% last June….the price index for intermediate trade services was 2.5% higher, as margins for intermediate metals, minerals, and ores wholesalers rose 13.9%, margins for intermediate hardware, building material, and supplies retailers rose 10.6%, and margins for intermediate building materials, paint, and hardware wholesalers rose 1.4%…meanwhile, the index for transportation and warehousing services for intermediate demand was 2.1% higher, as the intermediate price index for air transportation of freight rose 4.7%, the intermediate price index for water transportation of freight rose 3.5%, and the intermediate price index for arrangement of freight and cargo rose 20.5%….at the same time, the core price index for intermediate services other than trade, transportation, and warehousing services rose 0.4%, as the intermediate price index for passenger car rental rose 4.4%, the intermediate price index for residential property management fees rose 5.0%, the intermediate price index for television advertising time sales rose 3.6%, and the intermediate price index for traveler accommodation services rose 3.9%, while the intermediate price index for truck, utility trailer, and RV rental and leasing fell 1.5%…over the 12 months ended in June, the year over year price index for services for intermediate demand is now 8.7% higher than it was a year ago, the tenth consecutive positive annual change since it briefly turned negative year over year from April to August of last year, and the largest 12-month advance in the eleven year history of this index..