US Producer Prices Continue to Deflate in November with Lower Energy Prices

The Producer Price Index for final demand in November continued with the disinflation view, PPI was unchanged month-over-month (consensus 0.1%), as was the index for final demand less foods and energy (consensus 0.2%). On a year-over-year basis, the index for final demand was up 0.9%, versus 1.2% in October, and the index for final demand less foods and energy was up 2.0%, versus 2.3% in October. The index for processed goods for intermediate demand was unchanged month-over-month while the index for unprocessed goods for intermediate demand declined 1.4% in November.

The Producer Price Index (PPI) followed on with the disinflation tact being seen in some consumer prices, which keeps pass-through effects to the consumer less an issue. Treasury yields turned lower in response. The 2-yr note yield, at 4.71% just before the data, was down seven basis points from yesterday at 4.67%. The 10-yr note yield, at 4.19% just before the data, was down four basis points from yesterday at 4.16%.


The report coupled with consumer inflation data out yesterday shows an underlying price measure fell more than forecast despite the cost-of-living squeeze on US households. The recent fall in energy prices has been the big improvement. The key takeaway is the numbers reflects a sharp moderation in prices at the wholesale level, which should remain relatively subdued barring a future jump in energy prices.

November 2023 PPI

US PPI Highlights.

  • PPI Final Demand M/M Nov: 0.0% (est 0.0%, prevR -0.4%)
  • PPI Final Demand Y/Y Nov: 0.9% (est 1.0%, prevR 1.2%)
  • PPI Ex Food and Energy M/M Nov: 0.0% (est 0.2%, prev -0.5%)
  • PPI Ex Food and Energy Y/Y Nov: 2.0% (est 2.2%, prev 2.4%)

Until September annual producer inflation eased for 11 straight months, the least since December 2020.

Where the price gains and losses were:

Within goods, gasoline cost fell the most (-4.1%) followed by industrial chemicals, jet fuel, and liquefied petroleum gas. In contrast, prices of food increased with chicken eggs jumping 58.8% followed by fresh fruits and melons. Utility natural gas and electric power moved higher.

Within services, traveler accommodation went up 4% and costs increased for deposit services; health, beauty, and optical goods retailing; food and alcohol wholesaling; and apparel, footwear, and accessories retailing. In contrast, margins for automobile retailing declined 5.1% followed by chemicals, portfolio management, furniture, and truck transportation.


US PPI Annually
US PPI Monthly



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

US November CPI

Consumer prices are proving sticky in the US as shelter prices, which make up about a third of the overall CPI index, rose 0.4%, offsetting a much-heralded decline in gasoline prices. This would not go unnoticed by the Fed wanting a sustained moderation in the shelter category as key to bringing core inflation down. That should continue to give the Fed some pause about cutting rates anytime soon. The Consumer Price Index increased 0.1% month-over-month in November (consensus 0.0%) while the core Consumer Price Index, which excludes food and energy, increased 0.3% month-over-month, as expected.

Source BLS

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