The Producer Price Index for final demand rose 0.3% in January, seasonally adjusted, the US Bureau of Labor Statistics reported today. Final demand prices fell 0.1 percent and the final demand index rose 0.9 percent for the 12 months ending January 2024. In January, progress in the final demand index can be attributed to a 0.6 percent price rise for final demand services. In contrast, the final demand goods index decreased by 0.2 percent.
The final demand index excluding food, energy, and commercial services rose 0.6 percent in January 2024, the largest advance since rising 0.6 percent in January 2023. For the 12 months ending in January 2024, final demand prices excluding food, energy, and commercial services rose 2.6 percent.
Final Order Final Order Services: The Final Order Services Index rose 0.6 percent in January and the largest increase since its 0.8 percent rise in July 2023. In January, most of the progress was attributable to prices for final demand services minus trade, transportation, and warehousing, which rose 0.8 percent. The final order trade services index rose 0.2 percent. (Measuring trade indicators
Changes in margins received by wholesalers and retailers.) Conversely, final order prices for transportation and warehousing services decreased by 0.4 percent.
Product Details: The 2.2 percent increase in the Hospital Outpatient Care Index was a major factor, as was the rise in end-order service prices for January. Indicators of chemicals and related products wholesale, wholesale of machinery and equipment, portfolio management, traveler accommodation and legal services also rose. In contrast, prices for carrying cars over long distances.
Average demand by commodity type
Within average demand in January, the manufactured goods index fell by 0.2 percent, the prices and non-manufactured goods index rose by 0.1 percent, and the services index rose by 0.5 percent.
Medium Demand Manufactured Goods Index: Average Demand Manufactured Goods Index fell 0.2 percent in January, the fourth consecutive decline. Leading the decline in January were manufactured energy commodity prices that fell 1.7 percent. The manufactured food and feed sector decreased by 1.5 percent. Conversely, prices of manufactured goods minus food and energy rose.
0.3 percent. For the 12 months ending in January, the index for intermediate manufactured goods and demand fell by 3.8 percent.
Product Details: Leading the decline in prices of manufactured goods for average demand, the Electric Power Index fell by 2.1 percent. Prices of basic organic chemicals, gasoline, and stocks of animal feed and lubricating oils also declined. In contrast, the index for inedible fats and oils jumped 23.3 percent. Prices of natural gas and cold-rolled steel plates and strips also increase.
Average demand non-manufactured goods index: Average demand non-manufactured goods index rose 0.1 percent in January after three consecutive declines. The increase is due to the prices of unprocessed energy materials, which rose by 3.8 percent. On the contrary, the index prices of unprocessed food and feed items decreased by 2.2%, and the prices of unprocessed non-food items also decreased by 2.2%.
Less energy materials decreased by 1.7 percent. For the 12 months ending in January, the average demand non-manufactured goods index rose 15.0 percent.
Net production price indices for industry
Producer price indices are compiled for net production of industries and their products according to the North American Industry Classification System (NAICS). Prior to its January 2004 release, industry-based PPIs were published in accordance with the Standard Industrial Classification (SIC) system. Industry price indexes are consistent with other economic indicators
Industry-organized time series, such as data on employment, wages, and productivity. Primary product indices that show changes in prices received by establishments classified within an industry for products made primarily, but not necessarily exclusively, by that industry. The industrial classification of an enterprise is determined by the products and they make up a multitude of the total value of the shipment. In addition, most industries have
By-product indices that show changes in prices received by enterprises for products made mainly in some other industry. Some industries have miscellaneous receipts and indices that track price changes for other revenue sources received by facilities
Within an industry that does not derive from sales of its products; For example, resale of purchased materials, or revenue from factory-owned parking lots. Producer price indices may be constructed using selling prices reported by establishments of all sizes, selected by probability sampling, with probability of selection proportional to size. Individual items and transaction terms are also chosen by probability proportional to size. BLS strongly encourages cooperating companies to provide actual transactions
Prices are at the time of shipping to minimize the use of list prices. Prices provided by survey participants are valid on the Tuesday of the week containing the 13th day of the month. The survey is conducted online through the BLS Internet Data Collection Facility (IDCF).) Data provided by survey participants is supplemented with data from other sources for some regions.
A brief explanation of producer price indices
The Bureau of Labor Statistics (BLS) Producer Price Index (PPI) is a set of indicators that measure the average change over time in the prices received (price changes) by producers of domestically produced goods, services, and construction. Producer price indices measure price change from the seller’s perspective. This contrasts with other measures, such as the Consumer Price Index (CPI). Consumer price indexes measure the price change from the buyer
Over 10,000 PPIs are issued for both individual products and product groups each month. Producer price indices are available for products of almost every industry in the mining and manufacturing sectors. Over time, new producer price indices were introduced for products of industries in the service and construction sectors of the US economy. As of January
In 2023, the PPI covered 69 percent of services as measured by 2017 Census revenues, and 17 percent of construction. Over 64,000 monthly quotes are organized into three sets of PPIs:
(1) Indicators of final demand and intermediate demand
(2) commodity indices,
(3) Net output indicators for industries and their products. FD-ID structure
It organizes products by buyer category and manufacturing degree, as well as by manufacturing stage of production. The item structure organizes products according to similarity of end use or product type. Samples are taken from the complete production of different industries to derive price indices for the net output of industries and their products. Final Demand-Intermediate Demand Indicators: The PPI FD-ID structure measures the change in prices of goods, services, and construction sold for final demand and intermediate demand. The FD-ID system replaced the PPI- and System-of-Processing (SOP) stage as the primary aggregation model for PPI with the January 2014 data release. The FD-ID model expands coverage beyond the SOP system by adding services, construction, exports.
