Producer Prices Up 1.0% in January

RJS, MarketWatch 666, Producer Prices Rose 1.0% in January, but Annual Increases are Off the Record Highs

The seasonally adjusted Producer Price Index (PPI) for final demand rose 1.0% in January, as average prices for finished wholesale goods rose 1.3% while final demand for services rose 0.7% . . . that increase followed a revised 0.4% increase in December, when average prices for finished wholesale goods fell 0.1%, while margins of final services providers were 0.7% higher. a revised 0.9% increase in November, when prices for finished wholesale goods rose 0.9% and margins of final services providers were also 0.9% higher, a revised 0.7% increase in October, when prices for finished wholesale goods rose 1.3% while margins of final services providers were 0.2% higher, and a revised 0.5% increase in September, when prices for finished wholesale goods rose 1.2% while margins of final services providers were 0.1% higher . . . note that the PPI for the prior months of 2021 was also revised to reflect a recalculation of seasonal adjustment factors . . . on an unadjusted basis, producer prices are 9.7% higher than a year ago, down from the upwardly revised 9.8% year over year increase now shown for December’s producer prices, while the core producer price index, which excludes food, energy and trade services, rose by 0.9% for the month, and is now 6.9% higher than in a year ago, down from the revised 7.0% year over year core PPI increase that is now indicated for December…

Below we are including a graph showing the year over year change in the PPI Final Demand price index, monthly over the period that metric has been computed:

As we noted, the price index for final demand for goods, previously called ‘finished goods’, was 1.3% higher in January, after being revised to 0.1% lower in December, 0.9% higher in November, 1.3% higher in October, 1.2% higher in September, 1.0% higher in August, 0.8% higher in July, 1.3% higher in June, 1.4% higher in May, 1.0% higher in April, 1.3% higher in March, 1.4% higher in February, and 1.5% higher in January of last year, and hence is now up by 13.1% from a year ago, albeit down from November’s 14.85% record annual increase . . . the finished goods price index rose 1.3% in January as the price index for wholesale energy goods was 2.5% higher, after it had fallen 1.7% in December, risen by a revised 0.9% in November, by a revised 5.0% in October and by 2.5% in September, and as the price index for whole-sale foods rose 1.6%, after falling by a revised 0.3% in December, rising by a revised 1.2% in November but falling by a revised 0.1% in October, while the index for final demand for core wholesale goods (excluding food and energy) was 0.8% higher, after it had risen by a revised 0.4% in December, by a revised 0.8% in November, and by a revised 0.7% in October . . . wholesale energy prices averaged 2.5% higher on a 1.9% increase in wholesale prices for gasoline, a 9.4% increase in wholesale prices for diesel fuel, a 7.3% increase in wholesale prices for home heating oil. and a 14.1% increase in wholesale prices for liquefied petroleum gas, while the wholesale food price index rose 1.6% on a 6.5% increase in wholesale prices for beef and veal, a 3.9% increase in the wholesale price index for fresh fruits and melons, a 8.7% increase in the wholesale price index for oilseeds, and an 3.0% increase in the wholesale price index for pasta products, even as the wholesale price index for eggs for fresh use fell 17.6% . . . among core wholesale goods, the wholesale price index for household appliances rose 1.4%, the wholesale price index for computers and computer equipment rose 2.2%, the wholesale price index for tires rose 4.6%. the wholesale price index for construction machinery and equipment rose 3.0%, the wholesale price index for textile machinery and equipment rose 5.5%, the wholesale price index for mobile homes rose 3.1%, the wholesale price index for sporting and athletic goods rose 3.3%, and the wholesale price index for truck trailers rose 3.1%. Save big by buying construction equipment from a marketplace like Boom & Bucket.

At the same time, the index for final demand for services rose 0.7% in January, after rising a revised 0.7% in December. a revised 0.9% in November, a revised 0.2% in October, a revised 0.1% in September, a revised 0.8% in August, and by 1.0% in July, and is now up by 7.7% from a year ago, albeit down from the record 8.1% year over year increase that is now indicated for December . . . the index for final demand for trade services rose 0.6%, while the index for final demand for transportation and warehousing services was unchanged, while the core index for final demand for services less trade, transportation, and warehousing services was 0.9% higher . . . among trade services, seasonally adjusted margins for flooring and floor coverings retailers rose 17.1%, margins for apparel, jewelry, footwear, and accessories retailers rose 4.2%, margins for TV, video, and photographic equipment and supplies retailers rose 5.9%, margins for hardware, building materials, and supplies retailers rose 4.7%, and margins for machinery and vehicle wholesalers rose 4.3%, while margins for fuels and lubricants retailers fell 9.7% . . . among transportation and warehousing services, average margins for rail transportation of freight and mail rose 1.6% and margins for truck transportation of freight rose 1.3%, while margins for airline passenger services fell 4.2% . . . among the components of the core final demand for services index, price index for traveler accommodation services rose 5.4%, the price index for hospital outpatient care rose 1.6%, the price index for architectural and engineering services rose 2.7% and the price index for portfolio management rose 1.9%, while the price index for passenger car rental fell 4.3%…

This report also showed the price index for intermediate processed goods rose 1.7% in January, after falling a revised 0.1% in December, but after rising a revised 1.5% in November, a revised 2.4% in October, a revised 1.2% in September, and a revised 1.0% in August . . . the price index for intermediate energy goods rose 3.4% in January, as producer prices for liquefied petroleum gas rose 14.1%, producer prices for industrial electric power rose 2.6%, refinery prices for gasoline rose 1.9%, refinery prices for jet fuel rose 11.8%, and refinery prices for diesel fuel rose 9.4% . . . at the same time, the price index for intermediate processed foods and feeds rose 2.4%, as the producer price index for meats rose 2.2%, the producer price index for dairy products rose 4.5%, the producer price index for prepared animal feeds rose 3.4%, and the producer price index for fats and oils rose 3.8% . . . meanwhile, the core price index for intermediate processed goods less food and energy goods rose 1.2%, as the producer price index for softwood lumber rose 25.4%, the producer price index for plywood rose 8.4%, the producer price index for cement rose 4.5%, the producer price index for aluminum mill shapes rose 5.6%, the producer price index for copper and brass mill shapes rose 4.1%, the producer price index for metal containers rose 13.0%, the producer price index for wiring devices rose 2.9%, the producer price index for primary nonferrous metals rose 4.4%, the producer price index for prepared paint rose 6.6%, the producer price index for tires rose 4.6%, the producer price index for nitrogenates rose 5.4%, and the producer price index for other agricultural chemicals rose 4.6%, while the producer price index for plastic resins and materials fell 3.1% and the producer price index for steel mill products fell 1.6% . . . average prices for intermediate processed goods are now 24.1% higher than in January a year ago, down from their 24.3% year over year increase in December, and from there 26.5% year over year increase in November, which had been a 46 year high…..

Meanwhile, the price index for intermediate unprocessed goods fell 2.0% in January, after falling by a revised 4.8% in December, rising by a revised 2.3% in November, rising by a revised 6.0% in October, a revised 2.8% in September, a revised 1.4% in August, and rising by 3.2% in July, by 2.1% in June, and by 7.9% in May . . . that was as the January price index for crude energy goods fell 4.7% as unprocessed natural gas prices fell 26.1%, while crude oil prices rose 15.5% and coal prices rose 15.2% . . . at the same time, the price index for unprocessed foodstuffs and feedstuffs was 0.7% lower on a 7.0% decrease in producer prices for slaughter hogs, a 1.4% decrease in producer prices for slaughter cattle, a 3.2% decrease in producer prices for wheat, and a 4.3% decrease in producer prices for raw milk . . . meanwhile, the index for core raw materials other than food and energy materials was 0.1% higher, as a 8.0% increase in the price index for raw cotton and a 6.5% increase in the price index for nonferrous metal ores were mostly offset by a 10.7% decrease in the price index for iron and steel scrap and a 6.6% decrease in the price index for recyclable paper . . . this raw materials index now just 29.7% higher than a year ago, down from the 40.0% year over year increase in December and the record 59.2% annual increase in April, but still the fifteenth consecutive year over year increase for this index after the annual change on this index had been negative from the beginning of 2019 through October of 2020…

Lastly, the price index for services for intermediate demand rose 0.4% in January, after rising a revised 0.7% a revised 1.5% in November, and a revised 0.6% in November, after being unchanged in October, after rising by a revised 0.3% in September, a revised 0.4% in August, and rising by 0.6% in July and by 1.2% in June . . . the price index for intermediate trade services was unchanged, as margins for intermediate building materials, paint, and hardware wholesalers rose 1.7% and margins for intermediate paper and plastics products wholesalers rose 2.4%, while margins for intermediate chemicals and allied products wholesalers fell 4.1% and margins for intermediate metals, minerals, and ores wholesalers fell 0.9% . . . meanwhile, the index for transportation and warehousing services for intermediate demand was 0.3% higher, as the intermediate price index for rail transportation of freight and mail rose 1.6%, the intermediate price index for truck transportation of freight rose 1.3%, the intermediate price index for water transportation of freight rose 1.3%, the intermediate price index for courier and messenger services except for air mail rose 2.3%, and the intermediate price index for warehousing, storage, and related services rose 6.0%, while the intermediate price index for arrangement of freight and cargo fell 5.2% and the intermediate price index for transportation of passengers fell 4.1% . . . at the same time, the core price index for intermediate services other than trade, transportation, and warehousing services rose 0.6%, as the intermediate price index for network compensation from broadcast TV, cable TV, and radio rose 2.8%, the intermediate price index for advertising space sales in periodicals and newspapers rose 1.7%, the intermediate price index for architectural and engineering services rose 2.7%, the intermediate price index for portfolio management rose 1.9%. the intermediate price index for janitorial services rose 1.9%, and the intermediate price index for traveler accommodation services rose 5.4% . . . over the 12 months ended in January, the year over year price index for services for intermediate demand is now 7.3% higher than it was a year ago, the sixteenth consecutive positive annual increase in this index change since it briefly turned negative year over year from April to August of 2020, but is still down from the record 9.5% year over year increase indicated for July….