The BLS has released the December PPI report for 2024 and we don’t think it’s good trend for inflation despite some respite.
PRODUCER PRICE INDEXES - DECEMBER 2024
The Producer Price Index for final demand advanced 0.2 percent in December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.4 percent in November and 0.2 percent in October. (See table A.) On an unadjusted basis, the index for final demand increased 3.3 percent in 2024 after moving up 1.1 percent in 2023.
The December rise in prices for final demand can be traced to a 0.6-percent advance in the index for final demand goods. Prices for final demand services were unchanged.
The index for final demand less foods, energy, and trade services edged up 0.1 percent in December, the same as in November. Prices for final demand less foods, energy, and trade services rose 3.3 percent in 2024 after advancing 2.7 percent in 2023.
Final Demand
Final demand goods: The index for final demand goods rose 0.6 percent in December, the third consecutive advance. The December increase in prices for final demand goods is attributable to a 3.5-percent jump in the index for final demand energy. In contrast, prices for final demand foods edged
down 0.1 percent, while the index for final demand goods less foods and energy was unchanged.
Annualized inflation is running at 3.3 percent versus 2.7 in 2023 and this was without any added tariffs that the new Trump administration plans on imposing on Day 1 after entering office. Regardless of the type and scale of tariffs, it will likely result in higher inflation. Oil prices have been spiking as well due to new sanctions and it’s only a matter of time before that’s reflected in the overall inflation trend.
Stay tuned, stay profitable and stay solvent…