Producer Price Index (PPI) Much Weaker than Expected, but Big Upward Revisions

The PPI was flat vs Bloomberg consensus of up 0.3 percent. Revisions added 0.2 PP to January.

The BLS Reports …

PPI Month-Over-Month Details

The Producer Price Index for final demand was unchanged in February, seasonally adjusted.
Final demand prices rose 0.6 percent in January and 0.5 percent in December 2024.
A 0.3-percent increase in prices for final demand goods offset a 0.2-percent decline in the index for final demand services.
The index for final demand less foods, energy, and trade services moved up 0.2 percent in February after rising 0.3 percent in January.

Final Demand Goods Details

The index for final demand goods increased 0.3 percent in February, the fifth consecutive rise.
Leading the February advance, prices for final demand foods jumped 1.7 percent.
The index for final demand goods less foods and energy moved up 0.4 percent.
Final demand energy fell 1.2 percent. Prices for gasoline declined 4.7 percent.
Two-thirds of the February increase in the index for final demand goods is attributable to prices for chicken eggs, which jumped 53.6 percent.
The indexes for pork, fresh and dry vegetables, electric power, tobacco products, and carbon steel scrap moved higher.
The indexes for processed young chickens and for primary basic organic chemicals decreased.

Final Demand Services M/M and Y/Y

Final Demand Services Details

Final demand services: The index for final demand services fell 0.2 percent in February, the largest decline since moving down 0.2 percent in July 2024.
The February decrease can be traced to margins for final demand trade services, which dropped 1.0 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.)
In contrast, prices for final demand services less trade, transportation, and warehousing rose 0.2 percent, while the index for final demand transportation and warehousing services was unchanged.
Over 40 percent of the February decline in prices for final demand services is attributable to margins for machinery and vehicle wholesaling, which decreased 1.4 percent.
The indexes for food and alcohol retailing; automobiles and automobile parts retailing; apparel, footwear, and accessories retailing; chemicals and allied products wholesaling; and residential real estate loans (partial) also moved lower.
Prices for inpatient care advanced 0.8 percent. The indexes for hospital outpatient care and for machinery and equipment parts and supplies wholesaling also increased.

Producer Prices Year-Over-Year