Producer Price Index increases by 0.2% in December 2024
U.S. Bureau of Labor Statistics reports a continuation of modest price growth across several sectors
The U.S. wholesale prices increased 0.2 percent in December 2024, the lastest Bureau of Labor Statistics report says. This rise in the Producer Price Index (PPI) continues the trend of moderate price growth across the U.S. economy, having followed increases of 0.4 percent in November and 0.2 percent in October. The PPI serves as a key indicator of changes in selling prices received by domestic producers, but missed expectations.
Goods drive PPI increase
The December rise in the PPI was predominantly driven by a 0.6 percent hike in the index for final demand goods. Significant contributors to this increase include a 3.5 percent advance in energy prices and a marked 9.7 percent increase in gasoline prices. In contrast, fresh and dry vegetables experienced a significant price decline of 14.7 percent.
Services sector unchanged
The report highlighted that prices for final demand services remained unchanged in December after a 0.3 percent rise in November. Within the service sector, transportation of passengers saw a notable increase of 7.2 percent, while traveler accommodation services experienced a significant decrease of 6.9 percent.
Intermediate demand trends
Within intermediate demand, the index for processed goods rose by 0.3 percent, while unprocessed goods saw a 3.2 percent jump, driven largely by the sharp 57.7 percent rise in natural gas prices. The services for intermediate demand index also saw a 0.4 percent increase, reflecting broad-based price pressures.
Annual comparison and economic implications
On an annual basis, the PPI for final demand increased by 3.3 percent in 2024, up from the 1.1 percent gain recorded in 2023. This acceleration in producer prices is seen as a reflection of ongoing inflationary pressures, which could have significant implications for monetary policy and economic planning.
Sector-specific price movements
Detailed analyses showed diverse price movements across different sectors. While the index for processed goods for intermediate demand grew 0.3 percent, prices for fresh and dry vegetables declined by 14.7 percent, underscoring the variability in price pressures within agricultural commodities and energy products.
