The US Bureau of Labour Statistics (BLS) is reporting that the adjusted Producer Price Index (PPI) for final demand fell 0.3 per cent in May 2023.
This decline comes after a gain of 0.2 per cent in April and a decline of 0.4 per cent in March. The final demand index increased 1.1 per cent for the year ended May 2023 on an unadjusted basis but the final demand index experienced a monthly decline.
This decline is attributable to the 1.6 per cent decline in final demand goods prices while the final demand services index increased by 0.2 per cent in May. Prices for final demand less foods, energy, and trade services remained flat in May, following a mere increase of 0.1 per cent in April.
The index for final demand less foods, energy, and trade services rose 2.8 per cent for the year ended May 2023.
Final demand services
In May, the final demand services index increased by 0.2 per cent after increasing by 0.3 per cent in April. The margins for final demand trade services saw the biggest gain in May, up 1.0 per cent.
Prices for final demand services less trade, transportation, and warehousing saw a slight increase of 0.1per cent. In contrast, the index for final demand transportation and warehousing services saw a 1.4 per cent decline.
Final demand goods
The cost of final demand goods declined by 1.6 per cent in May, representing the biggest fall since the 1.6 per cent decline in July 2022. The final demand energy index, which fell 6.8 per cent, is primarily responsible for most of May’s dip.
Final demand foods saw a 1.3 per cent decline in prices. On the other hand, the index for final demand goods less foods and energy rose by 0.1 per cent.