January 16, 2024
In January, the Producer Price Index (PPI) for final demand in the United States increased by 0.3 percent, after experiencing a decline of 0.1 percent in December 2023 and an advance of 0.1 percent in November. The unadjusted basis shows a rise of 0.9 percent for the 12-month period ending January 2024. The advance in the index for final demand can be traced to a 0.6-percent rise in prices for final demand services. In contrast, the index for final demand goods decreased 0.2 percent.
The Producer Price Index (PPI) for final demand excluding foods, energy, and trade services rose by 0.6 percent in January 2024, marking the most substantial increase since January 2023 when it also rose by 0.6 percent. Over the 12 months leading up to January 2024, prices for final demand excluding foods, energy, and trade services increased by 2.6 percent.
Final demand goods
In January, the Producer Price Index (PPI) for final demand goods experienced a decline of 0.2 percent, marking the fourth consecutive month of decrease. This decline was primarily driven by a significant 1.7-percent drop in prices for final demand energy, alongside a 0.3-percent decrease in prices for final demand foods. However, there was a contrast in prices for final demand goods excluding foods and energy, which increased by 0.3 percent during the same period.
The decline in the Producer Price Index (PPI) for final demand goods was largely driven by a significant 3.6 percent drop in gasoline prices, leading the overall decrease. Additionally, prices for electric power, hay, hayseeds, and oilseeds, beef and veal, ethanol, and iron and steel scrap also experienced declines. However, there were some sectors that saw price increases, such as communication and related equipment, which saw a notable 2.4 percent rise. Furthermore, the indexes for soft drinks and liquified petroleum gas also moved higher during the same period.
Final demand services
In January 2024, the Producer Price Index (PPI) for final demand services increased by 0.6 percent, marking the most significant rise since July 2023 when it climbed by 0.8 percent. The majority of this increase can be attributed to prices for final demand services excluding trade, transportation, and warehousing, which saw a notable increase of 0.8 percent. Meanwhile, the index for final demand trade services also experienced a modest uptick, rising by 0.2 percent.
The increase in prices for final demand services was largely influenced by a notable 2.2-percent rise in the index for hospital outpatient care. Additionally, sectors such as chemicals and allied products wholesaling, machinery and equipment wholesaling, portfolio management, traveller accommodation services, and legal services also experienced price increases. However, there were decreases in prices for certain services, such as a 1.0-percent decline in long-distance motor carrying. Furthermore, the indexes for computer hardware, software, and supplies retailing, as well as engineering services, also saw decreases in prices during the same period.
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