Producer prices showed small increases in December, according to the Bureau of Labor Statistics. NAM Chief Economist Chad Moutray broke it down for us.
The numbers: “Producer prices for final demand goods and services rose 0.2% in December, pulling back from the 1.0% increase in November and the slowest monthly gain since November 2020,” said Moutray. “At the same time, producer prices for final demand goods fell 0.4% in December, the first decline since April 2020, with costs for food and energy down 0.6% and 3.3%, respectively.”
- Food and energy costs have jumped 12.9% and 31.9% year-over-year, respectively.
- Excluding food and energy, producer prices for final demand goods increased 0.5% in December, easing from the 0.8% gain in November.
- Producer prices for final demand services rose 0.5% in December, with transportation and warehousing costs up 1.7%.
Year in review: “Over the past 12 months, producer prices for final demand goods and services jumped 9.8% (seasonally adjusted), down from 9.9% in November, which was the largest increase on record for a series dating to November 2009,” said Moutray. “At the same time, core producer prices increased 6.9% year-over-year in December, the same pace as in November and remaining an all-time high.”
The cost of doing business: “Manufacturers continue to cite soaring raw material costs and supply chain disruptions as their top challenges, with the rapid acceleration in prices in this data over the past year helping to explain why,” said Moutray.