PRODUCER PRICE INDEXES - JANUARY 2023
The Producer Price Index for final demand increased 0.7 percent in January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices declined 0.2 percent in December 2022 and advanced 0.3 percent in November. (See table A.) On an unadjusted basis, the index for final demand rose 6.0 percent for the 12 months ended January 2023.
In January, a 1.2-percent rise in prices for final demand goods led the advance in the final demand index. Prices for final demand services also moved higher, increasing 0.4 percent.
The index for final demand less foods, energy, and trade services rose 0.6 percent in January 2023, the largest advance since moving up 0.9 percent in March 2022. For the 12 months ended in January 2023, prices for final demand less foods, energy, and trade services increased 4.5 percent.
Final Demand
Final demand goods: The index for final demand goods moved up 1.2 percent in January, the largest increase since rising 2.1 percent in June 2022. Most of the January advance is attributable to a 5.0-percent jump in prices for final demand energy. The index for final demand goods less foods and energy increased 0.6 percent. In contrast, prices for final demand foods fell 1.0 percent.
Product detail: Nearly one-third of the January rise in the index for final demand goods can be traced to prices for gasoline, which increased 6.2 percent. The indexes for residential natural gas, diesel fuel, jet fuel, soft drinks, and motor vehicles also moved higher. Conversely, prices for fresh and dry vegetables decreased 33.5 percent. The indexes for residual fuels and for basic organic chemicals also declined.
Final demand services: The index for final demand services advanced 0.4 percent in January, the same as in December. Over 80 percent of the broad-based increase in January is attributable to prices for final demand services less trade, transportation, and warehousing, which rose 0.6 percent. Margins for final demand trade services moved up 0.2 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services also advanced 0.2 percent.
Product detail: A major factor in the January rise in prices for final demand services was the index for hospital outpatient care, which jumped 1.4 percent. The indexes for automobiles and automobile parts retailing; health, beauty, and optical goods retailing; portfolio management; chemicals and allied products wholesaling; and airline passenger services also moved higher. In contrast, margins for fuels and lubricants retailing fell 17.5 percent. Prices for long-distance motor carrying and for securities brokerage, dealing, and investment advice also declined.
Intermediate Demand by Commodity Type
Within intermediate demand in January, the index for processed goods advanced 1.0 percent, prices for unprocessed goods fell 5.0 percent, and the index for services increased 0.5 percent.
Processed goods for intermediate demand: The index for processed goods for intermediate demand moved up 1.0 percent in January, the first advance since increasing 1.9 percent in June 2022. Leading the January rise, prices for processed energy goods jumped 5.4 percent. The index for processed foods and feeds advanced 0.3 percent. Conversely, prices for processed materials less foods and energy decreased 0.2 percent. For the 12 months ended in January, the index for processed goods for intermediate demand rose 3.8 percent.
Product detail: Over half of the January increase in prices for processed goods for intermediate demand can be attributed to the index for diesel fuel, which rose 10.9 percent. Prices for electric power, utility natural gas, gasoline, beef and veal, and nonferrous mill shapes also advanced. In contrast, the index for basic organic chemicals declined 2.2 percent. Prices for residual fuels and for animal and marine feed and fertilizer byproducts also decreased.
Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand fell 5.0 percent in January following a 1.5-percent rise in December. An 8.5-percent decline in prices for unprocessed energy materials accounted for 70 percent of the January decrease. The index for unprocessed foodstuffs and feedstuffs moved down 4.7 percent. Conversely, prices for unprocessed nonfood materials less energy increased 0.9 percent. For the 12 months ended in January, the index for unprocessed goods for intermediate demand rose 2.3 percent.
Product detail: Over 60 percent of the January decline in prices for unprocessed goods for intermediate demand can be attributed to the index for natural gas, which dropped 19.1 percent. Prices for ungraded chicken eggs, crude petroleum, slaughter chickens, slaughter hogs, and recyclable paper also decreased. In contrast, the index for nonferrous metal ores rose 4.5 percent. Prices for raw milk and for coal also advanced.
Services for intermediate demand: The index for services for intermediate demand moved up 0.5 percent in January after no change in December. Leading the advance, prices for services less trade, transportation, and warehousing for intermediate demand rose 0.8 percent. The index for transportation and warehousing services for intermediate demand moved up 0.4 percent. Conversely, margins for trade services for intermediate demand declined 0.6 percent. For the 12 months ended in January, the index for services for intermediate demand increased 5.9 percent.
Product detail: Over three-quarters of the January advance in the index for services for intermediate demand can be attributed to a 6.6-percent rise in prices for loan services (partial). The indexes for services related to securities brokerage and dealing (partial), chemicals and allied products wholesaling, legal services, portfolio management, and U.S. postal services also moved higher. In contrast, margins for fuels and lubricants retailing dropped 17.5 percent. The indexes for securities brokerage, dealing, and investment advice and for arrangement of freight and cargo transportation also declined.
Intermediate Demand by Production Flow
Stage 4 intermediate demand: Prices for stage 4 intermediate demand moved up 0.6 percent in January, the largest increase since advancing 0.9 percent in May 2022. In January, the index for total services inputs to stage 4 intermediate demand rose 0.7 percent, and prices for total goods inputs climbed 0.6 percent. (See table D.) Increases in the indexes for loan services (partial), electric power, services related to securities brokerage and dealing (partial), portfolio management, diesel fuel, and chemicals and allied products wholesaling outweighed declines in the indexes for securities brokerage, dealing, and investment advice; food wholesaling; and plastic packaging products. For the 12 months ended in January, prices for stage 4 intermediate demand moved up 5.1 percent.
Stage 3 intermediate demand: Prices for stage 3 intermediate demand increased 0.2 percent in January, the first advance since moving up 0.5 percent in June 2022. In January, the index for total services inputs to stage 3 intermediate demand rose 0.4 percent, while prices for total goods inputs were unchanged. Increases in the indexes for loan services (partial), diesel fuel, jet fuel, raw milk, U.S. postal services, and asphalt outweighed decreases in prices for ungraded chicken eggs, slaughter chickens, and arrangement of freight and cargo transportation. For the 12 months ended in January, the index for stage 3 intermediate demand advanced 3.8 percent.
Stage 2 intermediate demand: The index for stage 2 intermediate demand declined 1.5 percent in January after increasing 1.2 percent in December. In January, prices for total goods inputs to stage 2 intermediate demand fell 4.0 percent. Conversely, the index for total services inputs moved up 0.6 percent. Decreases in the indexes for natural gas, crude petroleum, fuels and lubricants retailing, oilseeds, arrangement of freight and cargo transportation, and basic organic chemicals outweighed advances in prices for loan services (partial), legal services, and coal. For the 12 months ended in January, prices for stage 2 intermediate demand increased 5.0 percent.
Stage 1 intermediate demand: The index for stage 1 intermediate demand rose 0.5 percent in January, the largest increase since advancing 1.0 percent in June 2022. In January, prices for total goods inputs to stage 1 intermediate demand moved up 0.8 percent, and prices for total services inputs climbed 0.2 percent. Increases in the indexes for diesel fuel, services related to securities brokerage and dealing (partial), utility natural gas, electric power, chemicals and allied products wholesaling, and gasoline outweighed declines in the indexes for basic organic chemicals; securities brokerage, dealing, and investment advice; and fuels and lubricants retailing. For the 12 months ended in January, prices for stage 1 intermediate demand moved up 4.8 percent.
Original source can be found here
