US final demand prices rise slightly less than forecast in December
By Alexander Bueso
Date: Wednesday 15 Jan 2020
(Sharecast News) - Producer prices in the States rose a tad less quickly than anticipated last month due to the drag from trade services prices.
According to the Department of Labor, so-called final demand prices edged up at a month-on-month pace of 0.1% in December (consensus: 0.2%), so that the year-on-year rate of change remained at 1.3% (consensus: 1.3%), as in November.
While goods prices rose at a month-on-month pace of 0.3%, those for services were flat, as trade services prices, which measure wholesalers and retailers' margins, fell by 0.3%.
On the services side of the equation, the drop in trade services more than offset a 2.7% jump in transportation and warehouse prices on the back of a 8.3% spike in airline fares.
Overall, core prices, which exclude food and energy, also rose by a tenth of a percentage point, but were similarly short of forecasts for an increase of 0.2%.
Within goods, energy prices bounded ahead by 1.5% on the month, but food costs dipped by 0.2%.
Commenting on Wednesday's data, Ian Shepherdson at Pantheon Macroeconomics said there was no overall threat to price stability from the report.
In terms of the big picture, the economist said: "Elsewhere, no big surprises; core goods inflation seems to be bottoming out, lagging the Chinese manufactured goods PPI. Healthcare services inflation dipped a bit after a run of big increases; we're still not sure if the trend is rising sustainably or if recent gains just represent a temporary rebound."
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