The US Producer Price Index (PPI) for final demand increased by 0.1 per cent in July 2024, seasonally adjusted, as reported by the US Bureau of Labour Statistics on Tuesday. This follows a 0.2 per cent rise in June and no change in May. On an unadjusted basis, the index for final demand rose 2.2 per cent over the past year. Final Demand Goods and Services In July, prices for final demand goods climbed by 0.6 per cent, the largest increase since February. This rise was primarily driven by a 1.9 per cent increase in final demand energy prices. Prices for final demand goods excluding foods and energy and for final demand foods also saw increases of 0.2 per cent and 0.6 per cent, respectively. On the other hand, prices for final demand services declined by 0.2 per cent, marking the largest decrease since March 2023. This drop was mainly due to a 1.3 per cent decrease in final demand trade services, which reflect changes in margins received by wholesalers and retailers. However, prices for services excluding trade, transportation, and warehousing, as well as for transportation and warehousing services, increased by 0.3 per cent and 0.4 per cent, respectively. Intermediate Demand Prices for intermediate-demand processed goods rose 0.7 per cent in July, the largest increase since February, driven by a 2.8 per cent rise in processed energy goods. The index for unprocessed goods surged 3.6 per cent, the highest advance since August 2022, due to a 6.2 per cent increase in unprocessed energy materials. Prices for intermediate-demand services grew by 0.3 per cent, marking the fifth consecutive increase. This rise was influenced by a 1.5 per cent increase in nonresidential real estate services. Stage of Intermediate Demand Stage 4 intermediate demand experienced a 0.4 percent increase in July, attributed to higher prices for nonresidential real estate services, machinery and equipment parts, and diesel fuel. Stage 3 intermediate demand rose 0.8 percent, with significant increases in diesel fuel and raw milk. Stage 2 intermediate demand advanced by 1.1 percent, driven by higher prices for crude petroleum and natural gas. Stage 1 intermediate demand increased by 0.7 percent, influenced by higher prices for diesel fuel and basic organic chemicals. The July PPI data highlights varied trends across different sectors, with notable sector-specific price movements for both goods and services. Attribution: PRODUCER PRICE INDEXES – JULY 2024 Sub-Editing: Y.Yasser
