January 13, 2022
The seasonally adjusted Producer Price Index for final demand gained 0.2% in December, according to the US Bureau of Labor Statistics. Following gains of 1.0% in November and 0.6% in October, the stock market has risen again. Final demand prices increased 9.7% in 2021 on an unadjusted basis, the largest calendar-year increase since data were first calculated in 2010.
The increase in the final demand index in December can be attributed to a 0.5-percent increase in final demand service costs. The index for final demand items, on the other hand, fell by 0.4%. Following a 0.8% gain in November, prices for final demand excluding food, energy, and trade services rose 0.4% in December. Following a 1.3% increase in 2020, the final demand index excluding foods, energy, and trade services increased 6.9% in 2021.
Following a 0.9% increase in November, prices for final demand services increased by 0.5% in December. Margin increases for final demand trade services, which increased by 0.8%, account for more than half of the broad-based gain in December. (Trade indices track changes in wholesalers’ and retailers’ profit margins.) Prices for final demand services excluding trade, transportation, and warehousing grew 0.2% and 1.7%, respectively, for final demand transportation and warehousing services.
The final demand goods index fell 0.4% in December, the first drop since April 2020, when it fell 2.8%. Final demand energy prices fell 3.3% in December, leading the fall. The final demand foods index declined 0.6%. Prices for final demand products, excluding food and energy, increased by 0.5%.
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