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The Producer Price Index for final demand declined 0.1 percent in July, according to the U.S. Bureau of Labor Statistics. Final demand prices inched up 0.1 percent in June and were unchanged in May. On an unadjusted basis, the final demand index increased 1.9 percent for the 12 months ended in July.
Over 80 percent of the July decrease in final demand prices is attributable to the index for final demand services, which fell 0.2 percent. Prices for final demand goods edged down 0.1 percent.
The index for final demand less foods, energy, and trade services was unchanged in July following a 0.2 percent advance in June. For the 12 months ended in July, prices for final demand less foods, energy, and trade services rose 1.9 percent.
Prices for final demand services moved down 0.2 percent in July, the first decline since a 0.3-percent drop in February. Most of the July decrease can be traced to margins for final demand trade services, which fell 0.5 percent. Additionally, prices for final demand transportation and warehousing services declined 0.8 percent. In contrast, the index for final demand services less trade, transportation, and warehousing advanced 0.2 percent.
About 60 percent of the July decrease in prices for final demand services is attributable to a 5.8 percent drop in margins for chemicals and allied products wholesaling. The indexes for machinery and equipment wholesaling; portfolio management; apparel, footwear, and accessories retailing; airline passenger services; and fuels and lubricants retailing also moved lower. Conversely, prices for traveler accommodation services rose 2.2 percent. The indexes for apparel wholesaling and hospital outpatient care also increased.
Prices for final demand goods edged down 0.1 percent in July after inching up
0.1 percent in June. In July, the index for final demand energy fell 0.3 percent, and prices for final demand goods less foods and energy declined 0.1 percent. The index for final demand foods was unchanged.
A major factor in the July decrease in prices for final demand goods was the index for gasoline, which moved down 1.4 percent. Prices for beef and veal, utility natural gas, motor vehicles, and basic organic chemicals also fell. In contrast, the index for grains jumped 17.1 percent.
Prices for diesel fuel; pork; and consumer, institutional, and commercial plastic products also moved higher.