December 2023 Producer Price Index

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

The Producer Price Index for final demand fell 0.1 percent in December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved down 0.1 percent in November and 0.4 percent in October. (See table A.) On an unadjusted basis, the index for final demand rose 1.0 percent in 2023 after increasing 6.4 percent in 2022.

The December decrease in the index for final demand is attributable to a 0.4-percent drop in prices for final demand goods. The index for final demand services was unchanged.

The index for final demand less foods, energy, and trade services rose 0.2 percent in December after edging up 0.1 percent in both November and October. Prices for final demand less foods, energy, and trade services climbed 2.5 percent in 2023 following a 4.7-percent increase in 2022.

Final Demand

Final demand goods: The index for final demand goods fell 0.4 percent in December, the third consecutive decline. In December, nearly 60 percent of the decrease can be traced to a 1.2-percent drop in prices for final demand energy. The index for final demand foods moved down 0.9 percent, while prices for final demand goods less foods and energy were unchanged.

Product detail: In December, half of the decrease in the index for final demand goods is attributable to prices for diesel fuel, which dropped 12.4 percent. The indexes for jet fuel; eggs for fresh use; non- carbonated soft drinks; passenger cars; and hay, hayseeds, and oilseeds also moved lower. In contrast, prices for gasoline rose 2.1 percent. The indexes for carbonated soft drinks and for nonferrous scrap also increased. (See table 2.)

Final demand services: The index for final demand services remained unchanged in December, the same as in both November and October. In December, prices for final demand services less trade, transportation, and warehousing rose 0.4 percent. Conversely, the indexes for final demand trade services and for final demand transportation and warehousing services fell 0.8 percent and 0.4 percent, respectively. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: Within the index for final demand services in December, prices for securities brokerage, dealing, and investment advice increased 3.3 percent. The indexes for consumer loans (partial), application software publishing, airline passenger services, and fuels and lubricants retailing also moved higher. In contrast, margins for machinery and vehicle wholesaling decreased 5.5 percent. The indexes for guestroom rental, long-distance motor carrying, automobiles and parts retailing, and apparel wholesaling also fell.

Intermediate Demand by Commodity Type

Within intermediate demand in December, the index for processed goods fell 0.6 percent, prices for unprocessed goods dropped 4.4 percent, and the index for services rose 0.4 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand fell 0.6 percent in December, the third consecutive decline. In December, the decrease was led by a 3.8-percent drop in prices for processed energy goods. The index for processed foods and feeds fell 0.7 percent. Conversely, prices for processed materials less foods and energy rose 0.2 percent. The index for processed goods for intermediate demand fell 2.7 percent in 2023 after increasing 4.8 percent in 2022.

Product detail: Most of the December decrease in the index for processed goods for intermediate demand can be attributed to a 12.4-percent drop in prices for diesel fuel. The indexes for jet fuel, basic organic chemicals, prepared animal feeds, residual fuels, and natural gas to electric utilities also moved lower. In contrast, prices for cold rolled steel sheet and strip jumped 14.6 percent. The indexes for fabricated structural metal and for electric power also increased.

Unprocessed goods for intermediate demand: Prices for unprocessed goods for intermediate demand moved down 4.4 percent in December, the largest decline since falling 5.2 percent in May. Eighty percent of the December decrease can be traced to a 9.1-percent drop in the index for unprocessed energy materials. Prices for unprocessed foodstuffs and feedstuffs moved down 2.5 percent. Conversely, the index for unprocessed nonfood materials less energy increased 0.2 percent. Prices for unprocessed goods for intermediate demand fell 19.0 percent in 2023 after rising 10.7 percent in 2022.

Product detail: Over 80 percent of the decrease in the index for unprocessed goods for intermediate demand can be attributed to a 13.2-percent drop in prices for crude petroleum. The indexes for slaughter hogs; hay, hayseeds, and oilseeds; slaughter steers and heifers; corn; and carbon steel scrap also declined. In contrast, prices for nonferrous scrap increased 3.6 percent. The indexes for slaughter chickens and natural gas also moved higher.

Services for intermediate demand: The index for services for intermediate demand climbed 0.4 percent in December, the largest increase since moving up 0.6 percent in July. Over 80 percent of the broad-based December rise can be traced to a 0.5-percent advance in prices for services less trade, transportation, and warehousing for intermediate demand. The indexes for trade services for intermediate demand and for transportation and warehousing services for intermediate demand also moved up, 0.4 percent and 0.1 percent, respectively. In 2023, prices for services for intermediate demand increased 3.4 percent following a 6.0-percent jump in 2022.

Product detail: Over 20 percent of the December increase in the index for services for intermediate demand can be attributed to prices for securities brokerage, dealing, and investment advice, which moved up 3.3 percent. The indexes for gross rents for retail properties; management, scientific, and technical consulting services; television advertising time sales; metals, minerals, and ores wholesaling; and airline passenger services also rose. Conversely, prices for business loans (partial) decreased 1.6 percent. The indexes for long-distance motor carrying and for food and alcohol wholesaling also fell.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand increased 0.2 percent in December following a 0.1-percent rise in November. In December, the index for total services inputs to stage 4 intermediate demand moved up 0.4 percent, while prices for total goods inputs were unchanged. (See table D.) Increases in the indexes for securities brokerage, dealing, and investment advice; gross rents for retail properties; fabricated structural metal; portfolio management; electric power; and gasoline outweighed falling prices for diesel fuel, gross rents for office buildings, and business loans (partial). In 2023, the index for stage 4 intermediate demand rose 2.1 percent after moving up 5.9 percent in 2022.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand declined 0.4 percent in December, the third consecutive decrease. In December, the index for total goods inputs to stage 3 intermediate demand fell 1.4 percent. In contrast, prices for total services inputs increased 0.4 percent. Decreases in the indexes for diesel fuel; jet fuel; slaughter hogs; slaughter steers and heifers; hay, hayseeds, and oilseeds; and business loans (partial) outweighed higher prices for television advertising time sales, slaughter chickens, and cold rolled steel sheet and strip. In 2023, the index for stage 3 intermediate demand declined 2.4 percent following a 5.1-percent rise in 2022.

Stage 2 intermediate demand: Prices for stage 2 intermediate demand decreased 1.6 percent in December, the largest decline since dropping 2.5 percent in March. In December, the index for total goods inputs to stage 2 intermediate demand fell 4.1 percent. Conversely, prices for total services inputs increased 0.2 percent. Decreases in the indexes for crude petroleum, business loans (partial), oilseeds, basic organic chemicals, guestroom rental, and non-corrugated paperboard outweighed rising prices for deposit services (partial), natural gas, and nonferrous scrap. In 2023, the index for stage 2 intermediate demand moved down 5.5 percent after increasing 7.7 percent in 2022.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand fell 0.2 percent in December, the third consecutive decline. In December, the index for total goods inputs to stage 1 intermediate demand decreased 0.9 percent. In contrast, prices for total services inputs rose 0.4 percent. Declines in the indexes for diesel fuel, guestroom rental, basic organic chemicals, residual fuels, gross rents for office buildings, and long-distance motor carrying outweighed increases in prices for securities brokerage, dealing, and investment advice; gross rents for retail properties; and fabricated structural metal products. In 2023, the index for stage 1 intermediate demand fell 0.2 percent following a 5.4- percent rise in 2022.

Recalculated Seasonal Adjustment Factors and Relative Importance Figures to be Available on February 14, 2024

Each year with the release of PPI data for January, seasonal adjustment factors and relative importance figures are recalculated to reflect price movements from the just-completed calendar year. The following information relating to the seasonal-factor update will be available on February 14, 2024 (2 workdays prior to the release of PPI data for January 2024 on February 16, 2024):

* Direct seasonal factors for PPI commodity indexes for the year 2024, * Recalculated seasonal factors for the last 5 years (2019-2023) for PPI commodity indexes, * Recalculated seasonal factors for the last 5 years (2019-2023) for PPI Final Demand- Intermediate Demand indexes, * Recalculated seasonal index data for the last 5 years (2019-2023) for Final Demand- Intermediate Demand and commodity indexes. This revision to seasonally adjusted indexes for the previous 5 years will be posted to the PPI database on the BLS website.

In addition, the following relative importance figure tables, which include values for December 2023, will be available on February 14, 2024:

* Final demand by individual commodities * Final demand by component series * Individual commodities of intermediate demand by commodity type * Component series of intermediate demand by commodity type * Individual commodities of intermediate demand by production flow * Component series of intermediate demand by production flow * Commodities, all levels * Wherever-provided services and construction

This information will be available on the PPI website at www.bls.gov/ppi or by contacting the PPI Section of Index Analysis and Public Information at ppi-info@bls.gov or (202) 691-7705.