The Producer Price Index for final demand increased 0.6% in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported. Final demand prices rose 1.0% in March and 0.5% in February. On an unadjusted basis, the final demand index moved up 6.2% for the 12 months ended in April, the largest advance since 12-month data were first calculated in November 2010.
About two-thirds of the April advance in the final demand index can be traced to a 0.6% increase in prices for final demand services. The index for final demand goods also moved up 0.6%. The index for final demand less foods, energy, and trade services rose 0.7% in April following an increase of 0.6% in March. For the 12 months ended in April, prices for final demand less foods, energy, and trade services moved up 4.6%, the largest advance since 12-month data were first calculated in August 2014.
Final demand services: Prices for final demand services rose 0.6% in April, the fourth consecutive advance. Half of the broad-based increase in April is attributable to the index for final demand services less trade, transportation, and warehousing, which moved up 0.5%. Margins for final demand trade services also rose 0.5%, and the index for final demand transportation and warehousing services jumped 2.1%. (Trade indexes measure changes in margins received by wholesalers and retailers.)
Product detail: Within the index for final demand services in April, prices for portfolio management rose 1.5%. The indexes for airline passenger services; food retailing; fuels and lubricants retailing; physician care; and hardware, building materials, and supplies retailing also moved higher. Conversely, margins for machinery and vehicle wholesaling fell 5.6%. The indexes for apparel wholesaling and for securities brokerage, dealing, investment advice, and related services also declined.
Final demand goods: Prices for final demand goods climbed 0.6 percent in April, after rising 1.7% in March. Leading the April advance, the index for final demand goods less foods and energy increased 1.0%. Prices for final demand foods moved up 2.1%. In contrast, the index for final demand energy fell 2.4%.
Product detail: A major factor in the April increase in prices for final demand goods was the index for steel mill products, which jumped 18.4%. Prices for beef and veal, pork, residential natural gas, plastic resins and materials, and dairy products also moved higher. Conversely, the index for gasoline fell 3.4%. Prices for chicken eggs and for carbon steel scrap also declined.