Services Prices Decrease, Unprocessed Goods for Intermediate Demand Fell in August
The Producer Price Index for final demand (also known as wholesale prices) edged down 0.1% over the month in August, after prices jumped 0.7% in July. Over the year, producer prices moved up 2.6% in August, down from 3.1% in July. Meanwhile, prices for final demand excluding foods, energy and trade services increased 0.3% over the month in August, after rising 0.6% in July. Prices for these goods advanced 2.8% from August 2024.
Within final demand, prices for services slipped 0.2% in August, the largest decrease since April. Meanwhile, prices for goods ticked up 0.1%. The decline in prices for services is attributed to a 1.7% drop in margins for trade services, indicating companies are absorbing a larger share of those higher costs. Within the final demand services index, margins for machinery and vehicle wholesaling fell 3.9%, accounting for three-quarters of the August decrease. Within the final demand goods index, prices for iron and steel scrap climbed 2.7% over the month but rose just 2.3% from August 2024. Meanwhile, prices for private capital equipment for manufacturing industries jumped 4.4% over the year.
Processed goods for intermediate demand edged up 0.4% in August, down from 0.7% in July. A major factor in the advance can be attributed to a 5.5% gain in the aluminum mill shapes index. On the other hand, the index for utility natural gas declined 1.8%. Over the year, the index grew 2.6%, the largest 12-month increase since the 3.9% rise in January 2023.
Meanwhile, prices for unprocessed goods for intermediate demand fell 1.1% in August, after advancing 2.3% in July. More than three-quarters of the August drop can be traced to a 2.5% decline in the prices for unprocessed energy materials, with crude petroleum falling 2.8%. Additionally, prices for unprocessed nonfood materials less energy and for unprocessed foodstuffs and feedstuffs decreased 0.5% and 0.3%, respectively. Over the year, prices for unprocessed goods for intermediate demand increased 3.0%, the largest 12-month gain since the 6.5% rise in March.