WASHINGTON — Final demand PPI fell by 0.1% in December, well below the 0.2% gain expected, with an equally disappointing 0.1% decline outside of food and energy prices, data released by the Bureau of Labor Statistics Thursday showed.
An analysis of MNI survey data showed correct estimates in the most recent December reports and mixed misses in the prior years before that. The December data breaks the trend of underestimates seen in October and November.
The personal consumption price measure in the data, which some analysts use a preview measure for CPI and the PCE price index, fell 0.2% and was down 0.2% ex. food and energy and was flat also excluding trade services, suggesting concerns about a strong CPI reading may be misplaced.
Energy prices were flat in the month, with gasoline prices down 3.9% to offset gains in diesel fuel and jet fuel. Food prices were down 0.7%, cut by declines in vegetables and beef.
Trade services prices fell 0.6% in the month on declining profit margins. The core rate the BLS prefers, excluding the change in trade services as well as food and energy, was up 0.1% in December.
The year/year rates for these measures indicated some deceleration. Overall PPI was up 2.6% year/year in December after a 3.1% year/year rise in November.
At the same time, the year/year rate for PPI excluding food and energy slowed to 2.3% from 2.4% in November, and the year/year rate for PPI excluding food, energy and trade services also slipped to 2.3% from 2.4%.
