Producer Price Index Rises 0.4% in November 2024 Signaling Continued Inflation
The highest 12-month rise since February 2023 with food prices driving the increase
The Producer Price Index (PPI) for final demand rose by 0.4 percent in November 2024, according to the latest report from the U.S. Bureau of Labor Statistics. This increase follows a trend of rising prices, with October observing a 0.3 percent increase and September a 0.2 percent uplift. Over the past 12 months, the unadjusted final demand index has seen a significant 3.0 percent increase, marking the largest 12-month rise since February 2023.
The increase in November's PPI is largely attributed to a 0.7 percent rise in the index for final demand goods, driven notably by a staggering 54.6 percent jump in chicken egg prices. Other contributors include fresh and dry vegetables, fresh fruits and melons, processed poultry, and residential electric power. Despite the overall rise, certain sectors like oilseeds saw a decrease, with prices dropping by 4.7 percent.
Services, although showing a more modest increase, grew by 0.2 percent. The index for final demand services has shown consistent growth over the last four months. This growth is supported by a 0.8 percent increase in margins for final demand trade services, which was partially offset by a 0.5 percent decline in prices for transportation and warehousing services.
Focus on Intermediate Demand
Within the sphere of intermediate demand, November's data presented a mixed picture. Prices for unprocessed goods advanced by 0.6 percent, fueled by a 2.9 percent rise in prices for unprocessed foodstuffs and feedstuffs. Conversely, the index for services within intermediate demand saw a decrease of 0.3 percent, reflecting the largest drop since June 2022.
The PPI report emphasizes the ongoing inflationary pressure across various sectors, particularly noticeable within the food industry. These increases present challenges in managing economic growth and maintaining consumer purchasing power, as highlighted by the sharp increases in essential commodities.
