Updated: 13-Jun-17 09:15 ET

May PPI

Updated: 13-Jun-17 09:15 ET

Highlights

• The Producer Price Index for final demand was unchanged in May, as expected, while the index for final demand excluding food and energy was up a stronger than expected 0.3% (Briefing.com consensus 0.2%).

Key Factors

• The index for final demand was up 2.4% year-over-year, versus 2.5% in April, while the index for final demand excluding food and energy was up 2.1% versus 1.9% in April.
• Prices for final demand services increased 0.3% in May, led by a 1.1% increase in the index for final demand trade services
• Prices for final demand goods decreased 0.5% in May, which was the largest drop since a 0.6% decline in February 2016. The bulk of the decline can be attributed to a 3.0% drop in the index for final demand energy.
• The index for processed goods for intermediate demand rose 0.1%, logging its ninth consecutive monthly increase
• The index for unprocessed goods for intermediate demand declined 3.0% on the heels of a 3.3% increase in April

Big Picture

• The key takeaway from the report is that it supports the Fed's inclination to favor a policy tightening bias.

Category	MAY	APR	MAR	FEB	JAN
Final Demand	0.0%	0.5%	-0.1%	0.3%	0.6%
Core (excluding ...)
Food and Energy	0.3%	0.4%	0.0%	0.3%	0.4%
Food, Energy, and Trade	-0.1%	0.7%	0.1%	0.3%	0.2%
Final Demand Goods
Total	-0.5%	0.5%	-0.1%	0.3%	1.0%
Energy	-3.0%	0.8%	-2.9%	0.6%	4.7%
Finished Goods	-0.7%	0.6%	-0.2%	0.1%	1.1%
Final Demand Services
Total	0.3%	0.4%	-0.1%	0.4%	0.3%
Trade	1.1%	-0.3%	-0.1%	0.4%	0.9%
Intermediate Demand
Processed	0.1%	0.5%	0.1%	0.4%	1.1%
Unprocessed	-3.0%	3.3%	-4.2%	-0.2%	3.8%
Services	0.0%	0.9%	-0.2%	0.5%	0.3%