The Producer Price Index for final demand increased 0.4 percent in September, according to the U.S. Bureau of Labor Statistics. Final demand prices were up 0.2 percent in August and down 0.1 percent in July. On an unadjusted basis, the final demand index increased 2.8 percent for the 12 months ended in September. This was the largest rise since an advance of 2.8 percent for the 12 months ended February 2012.
Within final demand in September, prices for final demand services rose 0.4 percent, and the index for final demand goods climbed 0.7 percent.
Prices for final demand less foods, energy, and trade services increased 0.2 percent in September, the same as in August. For the 12 months ended in September, the index for final demand less foods, energy, and trade services advanced 2.1 percent.
The index for final demand services increased 0.4 percent in September, the largest rise since moving up 0.5 percent in April. Over 60 percent of the September advance can be traced to a 0.8 percent increase in margins for final demand trade services. The index for final demand transportation and warehousing services jumped 1 percent. Prices for final demand services less trade, transportation, and warehousing edged up 0.1 percent.
Nearly 30 percent of the increase in prices for final demand services can be attributed to margins for machinery, equipment, parts, and supplies wholesaling, which rose 1.3 percent. The indexes for apparel, footwear, and accessories retailing; health, beauty, and optical goods retailing; truck transportation of freight; deposit services; and food and alcohol wholesaling also advanced. In contrast, prices for residential real estate loans fell 2.6 percent. The indexes for automobiles and automobile parts retailing and for apparel wholesaling also declined.
Prices for final demand goods rose 0.7 percent in September, the largest increase since moving up 1 percent in January. Over 80 percent of the September advance can be traced to the index for final demand energy, which climbed 3.4 percent. Higher energy prices were likely the result of reduced refining capacity in the Gulf Coast area due to Hurricane Harvey. Prices for final demand goods less foods and energy moved up 0.3 percent. The index for final demand foods was unchanged.
Two-thirds of the September increase in the final demand goods index can be attributed to prices for gasoline, which jumped 10.9 percent. The indexes for jet fuel, motor vehicles, diesel fuel, fresh and dry vegetables, and chicken eggs also moved higher. Conversely, prices for young chickens fell 4.7 percent. The indexes for electric power and integrated microcircuits also declined.
