December Producer Prices Rose 0.3%

Washington, DC, January 13, 2017—The Producer Price Index for final demand increased 0.3% in December, seasonally adjusted, the U.S. Bureau of Labor Statistics has reported.

Final demand prices advanced 0.4% in November and were unchanged in October.

On an unadjusted basis, the final demand index climbed 1.6% in 2016 after falling 1.1% in 2015.

In December, nearly 80% of the advance in the final demand index is attributable to a 0.7% increase in prices for final demand goods.

The index for final demand services inched up 0.1%.

Prices for final demand less foods, energy, and trade services moved up 0.1% in December after rising 0.2% in November.

In 2016, the index for final demand less foods, energy, and trade services climbed 1.7% following a 0.3% advance in 2015.

Prices for final demand goods jumped 0.7% in December, the largest increase since a 0.7% rise in June. Sixty percent of the December broad-based advance can be traced to the index for final demand energy, which climbed 2.6%. Prices for final demand goods less foods and energy rose 0.3%, and the final demand foods index

increased 0.7%.

Accounting for almost half of the December jump in final demand goods prices, the index for gasoline climbed 7.8%. Prices for light motor trucks, jet fuel, iron and steel

scrap, chicken eggs, and liquefied petroleum gas also increased. In contrast, the index for fresh fruits and melons fell 13.6%. Prices for residential electric power and for plastic resins and materials also decreased.

The index for final demand services inched up 0.1% in December after increasing 0.5% in November. About 70% of the December advance can be attributed to prices for final demand services less trade, transportation, and warehousing, which rose 0.2%. The index for final demand trade services also advanced 0.2%.

Conversely, prices for final demand transportation and warehousing services declined 0.4%.

Most of the December increase in the index for final demand services can be

traced to prices for securities brokerage, dealing, investment advice, and related services, which advanced 4.4%. The indexes for machinery, equipment, parts, and supplies wholesaling; apparel, footwear, and accessories retailing; food retailing; and health, beauty, and optical goods retailing also moved higher. In contrast, prices for airline passenger services fell 2.4%. The indexes for fuels and lubricants retailing, loan services (partial), and apparel wholesaling also decreased.