US Producer Price Index Drops 0.3% MoM in May

June 19, 2023

The Producer Price Index for final demand declined 0.3 percent in May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported. Final demand prices rose 0.2 percent in April and fell 0.4 percent in March. On an unadjusted basis, the index for final demand moved up 1.1 percent for the 12 months ended in May.

In May, the decline in the final demand index can be traced to prices for final demand goods, which fell 1.6 percent. The index for final demand services increased 0.2 percent.

Prices for final demand less foods, energy, and trade services were unchanged in May after inching up 0.1 percent in April. For the 12 months ended in May, the index for final demand less
foods, energy, and trade services increased 2.8 percent.

Final Demand

Final demand goods: Prices for final demand goods moved down 1.6 percent in May, the largest decrease since falling 1.6 percent in July 2022. Most of the May decline is attributable to the index for final demand energy, which dropped 6.8 percent. Prices for final demand foods moved down 1.3 percent. In contrast, the index for final demand goods less foods and energy increased 0.1 percent.

Product detail: Sixty percent of the May decline in the index for final demand goods can be traced to a 13.8-percent drop in prices for gasoline. The indexes for diesel fuel, chicken eggs, jet fuel, fresh and dry vegetables, and iron and steel scrap also fell. Conversely, prices for tobacco products advanced 1.7 percent. The indexes for electric power and for beverages and beverage materials also increased.

Final demand services: The index for final demand services moved up 0.2 percent in May following a 0.3- percent advance in April. Leading the May increase, margins for final demand trade services rose 1.0 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand services less trade, transportation, and warehousing edged up 0.1 percent. In contrast, the index for final demand transportation and warehousing services declined 1.4 percent.

Source: U.S. BUREAU OF LABOR STATISTICS
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