October Producer Price Index: Final Demand Unchanged

Today's release of the October Producer Price Index (PPI) for Final Demand came in at 0.0% month-over-month seasonally adjusted, down from last month's 0.3%. It is at 0.9% year-over-year, up from 0.7% YoY last month. Core Final Demand (less food and energy) came in at -0.2% MoM, down from 0.2% the previous month and is up 1.2% YoY. Investing.com MoM consensus forecasts were for 0.3% headline and 0.2% core.

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

The Producer Price Index for final demand was unchanged in October, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.3 percent in September and were unchanged in August. (See table A.) On an unadjusted basis, the final demand index increased 0.8 percent for the 12 months ended in October, the largest 12-month rise since advancing 0.9 percent in December 2014.

Within final demand in October, a 0.4-percent increase in the index for final demand goods offset a 0.3-percent decline in prices for final demand services.

Prices for final demand less foods, energy, and trade services edged down 0.1 percent in October after rising 0.3 percent in both August and September. For the 12 months ended in October, the index for final demand less foods, energy, and trade services advanced 1.6 percent, the largest increase since climbing 1.7 percent for the 12 months ended September 2014. 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.

Final Demand vs. Finished Goods
FRED® Graphs ©Federal Reserve Bank of St. Louis. All rights reserved.