November Producer Price Index: Final Demand Up 0.4% MoM

Today’s release of the November Producer Price Index (PPI) for Final Demand came in at 0.4% month-over-month seasonally adjusted, unchanged from last month’s 0.4%. It is at 3.1% year-over-year, up from 2.8% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) came in at 0.3% MoM, down from the previous month and is up 2.4% YoY NSA. Investing.com MoM consensus forecasts were for 0.4% headline and 0.2% core.

Here is the summary of the news release on Final Demand:

The Producer Price Index for final demand increased 0.4 percent in November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices also moved up 0.4 percent in both October and September. (See table A.) On an unadjusted basis, the final demand index rose 3.1 percent for the 12 months ended in November, the largest advance since a 3.1-percent increase for the 12 months ended January 2012.

In November, three-fourths of the rise in the final demand index is attributable to a 1.0-percent increase in prices for final demand goods. The index for final demand services climbed 0.2 percent.

The index for final demand less foods, energy, and trade services rose 0.4 percent in November, the largest advance since increasing 0.6 percent in April. For the 12 months ended in November, prices for final demand less foods, energy, and trade services moved up 2.4 percent. More…

Finished Goods: Headline and Core

The BLS shifted its focus to its new “Final Demand” series in 2014, a shift we support. However, the data for these series are only constructed back to November 2009 for Headline and April 2010 for Core. Since our focus is on longer-term trends, we continue to track the legacy Producer Price Index for Finished Goods, which the BLS also includes in their monthly updates.

As this overlay illustrates, the Final Demand and Finished Goods indexes are highly correlated.