The Producer Price Index (PPI) for final demand (seasonally adjusted) dropped 0.5 percent in October after an increase of 0.4 percent in September.
October’s is the largest decrease in final demand prices since a 1.2-percent drop in April 2020, a Bureau of Labor Statistics press release said Wednesday. On an unadjusted basis, the index for final demand rose 1.3 percent for the 12 months ended in October, according to the press release.
The index for final demand goods fell 1.4 percent last month. Prices for final demand services, however, was unchanged. The index for final demand less foods, energy, and trade services advanced 0.1 percent in the month, marking the fifth consecutive rise. For the 12 months ended in October, prices for final demand less foods, energy, and trade services moved up 2.9 percent.
Prices for final demand goods slipped 1.4 percent in October, the first decrease since May when it fell 1.5 percent. A major factor in the October decline was the index for final demand energy, which dropped 6.5 percent, the release said. Prices for final demand foods declined 0.2 percent. The index for final demand goods less foods and energy rose 0.1 percent.
During October, 80 percent of the decline in the final demand goods index arose from a 15.3-percent fall in gasoline prices. On the other hand, the prices for tobacco products rose 2.4 percent. The indexes for butter and for residual fuels also moved up.
Prices for final demand services bucked the advancing trend of the previous six months and remained unchanged in October. Increases of 1.5 percent in the index for final demand transportation and warehousing services and 0.1 percent in prices for final demand services less trade, transportation, and warehousing offset a 0.7-percent decline in margins for final demand trade services in the month. (Trade indexes measure changes in margins received by wholesalers and retailers.)
Read the full BLS press release here.