Today’s release of the October Producer Price Index (PPI) for Final Demand came in at 0.6% month-over-month seasonally adjusted, up from last month’s 0.2%. It is at 2.9% year-over-year, up from 2.6% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) came in at 0.5% MoM, up from 0.2% the previous month and is up 2.6% YoY NSA. Investing.com MoM consensus forecasts were for 0.2% headline and 0.2% core.
Here is the summary of the news release on Final Demand:
The Producer Price Index for final demand rose 0.6 percent in October, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.2 percent in September and declined 0.1 percent in August. (See table A.) On an unadjusted basis, the final demand index increased 2.9 percent for the 12 months ended in October.
In October, over 60 percent of the rise in final demand prices can be traced to a 0.7-percent advance in the index for final demand services. Prices for final demand goods moved up 0.6 percent.
The index for final demand less foods, energy, and trade services rose 0.2 percent in October after climbing 0.4 percent in September. For the 12 months ended in October, prices for final demand less foods, energy, and trade services advanced 2.8 percent. 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 (older) overlay illustrates, the Final Demand and Finished Goods indexes are highly correlated.
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