The BLS has released the December Producer Price Index Report. (historical releases)
The Producer Price Index for final demand declined 0.5 percent in December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.2 percent in November and 0.4 percent in October. (See table A.) On an unadjusted basis, the index for final demand increased 6.2 percent in 2022 after rising 10.0 percent in 2021. In December, the decrease in the final demand index can be attributed to a 1.6-percent decline in prices for final demand goods.
Wait there is more...
Nearly half of the December decrease in the index for final demand goods can be traced to a 13.4-percent decline in prices for gasoline.
There are four stages of intermediate demand, with 3 having inflation rates slowing in December. However, stage 2 rate of inflation surged.
Stage 2 intermediate demand: Prices for stage 2 intermediate demand advanced 2.2 percent in December following three consecutive declines. In December, the index for total goods inputs to stage 2 intermediate demand rose 3.5 percent, and prices for total services inputs increased 1.1 percent. Advances in the indexes for natural gas, deposit services (partial), fuels and lubricants retailing, business loans (partial), carbon steel scrap, and aluminum base scrap outweighed declines in prices for crude petroleum, basic organic chemicals, and guestroom rental. In 2022, the index for stage 2 intermediate demand rose 8.7 percent after jumping 21.6 percent in 2021.
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This morning's release created quite a stir, for a few moments. Of course this report and the Retail Sales came out together. Coupled... suppressed a lot of hoopla. Inflation may be slowing, but so is consumer spending, which is a very large part of the economy.
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