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Producer Price Index rises nearly 10%, largest increase in a decade

From the U.S. Bureau of Labor Statistics

The Producer Price Index for final demand increased 0.8 percent in November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.6 percent in each of the 3 prior months.

On an unadjusted basis, the final demand index rose 9.6 percent for the 12 months ended in November, the largest advance since 12-month
data were first calculated in November 2010.

In November, the index for final demand services rose 0.7 percent and prices for final demand goods increased 1.2 percent.

The index for final demand less foods, energy, and trade services moved up 0.7 percent in November, the largest rise since climbing 0.8 percent in July. For the 12 months ended in November, prices for final demand less foods, energy, and trade services increased 6.9 percent,
the largest advance since 12-month data were first calculated in August 2014.

Final Demand

Final demand services: The index for final demand services rose 0.7 percent in November, the eleventh consecutive advance. Over half of the broad-based increase in November can be traced to prices for final demand services less trade, transportation, and warehousing, which climbed 0.6 percent.

The indexes for final demand trade services and for final demand transportation and warehousing services also moved higher, rising 0.6 percent and 1.9 percent, respectively. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: Leading the November increase in the index for final demand services, prices for portfolio management advanced 2.9 percent. The indexes for guestroom rental; securities brokerage, dealing, investment advice, and related services; fuels and lubricants retailing; airline passenger services; and transportation of freight and mail also moved higher.

In contrast, margins for chemicals and allied products wholesaling fell 1.3 percent. The indexes for furnishings wholesaling and for bundled wired telecommunications access services also declined.

Final demand goods: The index for final demand goods rose 1.2 percent in November following a 1.3-percent increase in October. In November, advances were broad based. Prices for final demand goods less foods and energy climbed 0.8 percent, the index for final demand energy jumped 2.6 percent, and prices for final demand foods moved up 1.2 percent.

Product detail: Within final demand goods in November, prices for iron and steel scrap rose 10.7 percent. The indexes for gasoline, fresh fruits and melons, fresh and dry vegetables, industrial chemicals, and jet fuel also moved higher. Conversely, prices for diesel fuel decreased 2.6 percent.

The indexes for processed young chickens and for light motor trucks also fell.

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