Producer Price Index for final demand fell in May 2014 after increases in April and March

The Producer Price Index for final demand fell 0.2 percent in May, seasonally adjusted. This decline followed increases of 0.6 percent in April and 0.5 percent in March. In May, the 0.2-percent decrease in final demand prices can be traced to decreases in the indexes for final demand services and final demand goods.

Prices for final demand services moved down 0.2 percent in May, the first decrease since a 0.3-percent drop in February. Most of the decline in May is attributable to the index for final demand trade services, which fell 0.5 percent. In contrast, the index for final demand transportation and warehousing services climbed 0.9 percent.

The index for final demand goods fell 0.2 percent in May, the largest decrease since a 0.7-percent drop in April 2013. In May, prices for final demand energy and final demand foods both declined 0.2 percent. Gasoline prices fell 0.9 percent, accounting for about half of the decline in the final demand goods index. Prices for basic organic chemicals; pork; pharmaceutical preparations; residential electric power; and natural cheese, except cottage cheese also moved down. In contrast, the diesel fuel index rose 3.9 percent in May. Prices for processed poultry and cigarettes also advanced.

The index for processed goods for intermediate demand moved down 0.1 percent in May following no change in April. In May, a 2.9-percent decrease in prices for basic organic chemicals was a major factor in the decline in the index for processed goods for intermediate demand. Prices for processed materials less foods and energy and for processed foods and feeds both fell 0.2 percent. In contrast, the index for processed energy goods rose 0.3 percent.

The index for unprocessed goods for intermediate demand was unchanged in May following a 0.4-percent advance in April. In May, a 2.7-percent increase in the index for unprocessed energy materials offset a 2.3-percent decrease in prices for unprocessed foodstuffs and feedstuffs and a 0.7-percent decline in the index for unprocessed nonfood materials less energy.

The index for services for intermediate demand moved down 0.4 percent in May, the largest decrease since a 0.5-percent drop in May 2013. The May 2014 decline was led by a 0.5-percent decrease in prices for services less trade, transportation, and warehousing for intermediate demand.

These data are from the BLS Producer Price Indexes program. To learn more, see "Producer Price Indexes — May 2014" (HTML) (PDF), news release USDL‑14‑1078. All producer price indexes are routinely subject to revision once, 4 months after original publication, to reflect the availability of late reports and corrections by respondents. Final demand includes goods, services, and construction which are sold for personal consumption, capital investment, government purchases, and export. Trade indexes measure changes in margins received by wholesalers and retailers. Intermediate demand includes goods, services, and maintenance and repair construction sold to businesses, excluding capital investment.