The Bureau of Labor Statistics' Producer Price Index report was in-line with economists' estimates for a 0.6% increase in October. Adjusted to remove the cost of food an energy, the core number was 0.4%, also in line with estimates.
September's report showed a 0.5% increase in the headline number and a 0.2% increase in the core figure.
On a year-over-year basis, the change in prices was the same as it was in September at 8.6%. Core final demand prices are up 6.2% year over year, compared to 5.9% the month prior.
Final Demand Goods
Final Demand Goods, which includes “pharmaceutical preparations destined for personal consumption, construction machinery and equipment for private capital investment, diesel fuel and jet fuel for government, and organic chemicals for export”, accounted for more 60% of the 1.2% increase in the index for final demand goods in October increase. This follows a 1.3% increase for the index in September.
Energy prices contributed to 75% of the 4.8% rise in goods for final demand. The core Final Demand Goods index rose just 0.4%.
Final Demand Services
Final Demand Services had a more modest increase in October than the goods portion. The Final Demand Services index increased 0.2% in October, with nearly two-thirds of this increase attributed to trade services, which measures changes in margins received by wholesalers and retailers. Margins for automobiles and automobile parts retailing dominated this price increase, rising 8.9%.
