December PPI rises 0.4%, annual increase hits 3.3%, goods lead with 0.7%, matching expectations.

January 14, 2025. The report shows that the prices for final demand goods increased by 0.6% in December, which was in line with expectations. The 9.7% jump in gasoline prices significantly contributed to this overall increase.

Here’s a detailed breakdown of the latest Producer Price Index (PPI) report for December 2024:

• Producer Price Index (PPI) Report for December 2024

  • Overall Increase: The PPI for final demand increased by 0.4% in December.
    • Goods: Prices for final demand goods rose by 0.7%.
    • Services: The index for final demand services increased by 0.2%.
  • Annual Increase: For the 12 months ended in December 2024, prices for final demand advanced by 3.3%.

  Breakdown by Sector

  • Energy: A significant contributor to the rise in goods prices, with notable increases in gasoline and heating oil prices.
  • Food: Prices for food also saw a slight uptick, particularly in categories like fruits, vegetables, and dairy products.
  • Core PPI: Excluding food and energy, the core PPI increased by 0.3% in December, indicating underlying inflation pressures.

  Impact

  • Supply Chain: Continued supply chain disruptions contributed to the price increases, particularly in the goods sector.
  • Labor Costs: Rising labor costs have impacted service prices, albeit to a lesser extent than goods.

  Outlook

  • Inflation: The data suggests that inflationary pressures remain, with goods prices showing more volatility than services.
  • Federal Reserve: These figures are likely to be considered by the Federal Reserve when making decisions about future monetary policy

https://www.bls.gov/pPI/

https://www.xtb.com/en/market-analysis/economic-calendar-us-ppi-data-in-focus-14-01-2025

Markets are relieved that YoY December producer prices only rose by 3.3%. But in the real world commodity prices are soaring. Here are some of the big YoY gains: cocoa 170%, coffee 75%, natural gas 50%, wheat 45%, sugar 40%, oil 35%, soybeans & copper 30%, and silver & gold 25%.

— Peter Schiff (@PeterSchiff) January 14, 2025