Updated: 13-Jun-18 09:23 ET

May PPI

Updated: 13-Jun-18 09:23 ET

Highlights

• The Producer Price Index for final demand increased 0.5% in May (Briefing.com consensus +0.3%), led by a 1.0% increase in prices for final demand goods that was largely attributable to a 4.6% jump in the index for final demand energy.
• The index for final demand, excluding food and energy, rose 0.3% (Briefing.com consensus +0.2%).

Key Factors

• On a year-over-year basis, the index for final demand was up 3.1% -- the largest increase since January 2012 -- versus 2.6% in April. The index for final demand, excluding food and energy, was up 2.4%, versus 2.3% in April.
• Prices for final demand goods increased 1.0% in May -- the largest rise since May 2015
• Prices for final demand services increased 0.3% -- the fifth consecutive monthly increase
• The index for final demand less foods, energy, and trade services rose 0.1% and is up 2.6% year-over-year

Big Picture

• The key takeaway from the report is that large increases were registered in the indexes for processed goods for intermediate demand (+1.5%) and unprocessed goods for intermediate demand (+2.5%), which was related mostly to higher energy prices. This suggests a potential buildup of pipeline pricing pressures that could carry through to the index for final demand if there isn't any energy price relief.

Category	MAY	APR	MAR	FEB	JAN
Final Demand	0.5%	0.1%	0.3%	0.2%	0.4%
Core (excluding ...)
Food and Energy	0.3%	0.2%	0.3%	0.2%	0.4%
Food, Energy, and Trade	0.1%	0.1%	0.4%	0.4%	0.4%
Final Demand Goods
Total	1.0%	0.0%	0.3%	-0.1%	0.7%
Energy	4.6%	0.1%	-2.1%	-0.5%	3.4%
Finished Goods	1.0%	-0.1%	0.2%	-0.3%	0.7%
Final Demand Services
Total	0.3%	0.1%	0.3%	0.3%	0.3%
Trade	0.9%	0.2%	0.2%	-0.2%	0.3%
Intermediate Demand
Processed	1.5%	0.5%	-0.3%	0.7%	0.7%
Unprocessed	2.5%	0.9%	-4.8%	2.8%	0.9%
Services	0.3%	0.3%	0.3%	0.5%	0.1%