Lower US Producer Price Inflation Dependent on Oil Prices

US Producer price inflation continues elevated, a long way from the Central Bank transitory mantra. Annual PPI rose to 9.7% in December. This was the largest increase since data were first calculated in December 2009. The 0.2% month-over-month rise was less than a consensus 0.4% due to the sharp drop in oil prices which has since reversed in January as has natural gas.

Inflation

December 2021 PPI

The Producer Price Index in December for final demand was up 9.6% on an unadjusted basis, less foods and energy was up 8.3%.

December Producer Price Index for final demand increased 0.2% month-over-month (consensus 0.4%) while the index for final demand, less foods and energy, increased 0.5% (consensus 0.4%).

However, most categories that saw decreases in December were due to a sharp drop in the price of oil at the end of November. That fall was reversed entirely in December and early January, so these savings will prove to be temporary

Highlights.

  • The index for final demand services rose 0.5% month-over-month, which was the 12th consecutive advance.
  • The index for final demand goods decreased 0.4% month-over-month, representing the first decrease since April 2020. This was largely due to a 3.3% drop in the index for final demand energy.
  • The index for processed goods for intermediate demand decreased 0.3% month-over-month, representing the first decrease since April 2020. The index rose 24.4% in 2021.
  • The index for unprocessed goods for intermediate demand decreased 5.6% month-over-month, representing the first decrease in nine months. The index jumped 38.0% in 2021.
  • The index for services for intermediate demand rose 0.8% month-over-month. The index was up 8.0% in 2021.

PPI rose amid supply and labor constraints as inflationary pressure builds., the year-over-year growth rate in PPI rose to a fresh record.

US PPI December 2021 Highlights

  • US PPI Final Demand (M/M) Dec: 0.2% (est 0.4%; prev 0.8%)
  • US PPI Final Demand (Y/Y) Dec: 9.7% (est 9.8%; prev 9.6%)
United States Consumer Price Index (CPI)
US PPI Annually
United States Producer Price Inflation MoM
US PPI Monthly

United States Producer Prices Final Demand Less Foods and Energy

Highlights November 2021

  • US PPI Ex-Food, Energy (M/M) Dec: 0.5% (est 0.5%; prev 0.7%)
  • US PPI Ex-Food, Energy (Y/Y) Dec: 8.3% (est 8.0%; prev 7.7%)

 

United States Producer Prices Final Demand Less Foods and Energy YoY
US Core PPI Inflation Annually
United States Producer Prices Final Demand Less Foods and Energy MoM
US Core PPI Inflation Monthly

Source BLS

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