Wednesday, February 18, 2015

Declining Gasoline Prices Continue to Cause Drop in Producer Prices

Producer prices continued to drop in January, falling 0.8%, seasonally adjusted, according to the U.S. Bureau of Labor Statistics. This was the seventh consecutive monthly decrease. The January decline in final demand prices is primarily due to a 2.1% decrease in the index for final demand goods.

Prices for final demand energy was the key factor in the decline, with the energy index falling 10.3% over the month. Gasoline prices led the decline in energy, which fell 24%.

Food prices also fell in January, dropping 1.1%. Final demand, excluding food, energy, and trade was up 0.1%.

The index for final demand services decreased 0.2% in January, the first decline since falling 0.3% in September 2014. In January, prices for final demand services less trade, transportation, and warehousing moved down 0.4%, and the index for final demand transportation and warehousing services dropped 0.8%. In contrast, margins for final demand trade services advanced 0.5%.

Read the BLS report.

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