The
consumer price index for all urban consumers (CPI-U) increased 0.4% in December
(+0.4% expected).
The increase in the all-items index was driven by an 8.4% increase in the
gasoline index, which accounted for more than 60% of the overall increase. The
other components of the energy index were mixed, resulting in an increase of
4.0% for the month. The food index rose in December, as both the food at home
and the food away from home indexes increased 0.4%.
The
index for all items less food and energy increased 0.1% in December after
rising 0.2% in the previous month. The indexes for apparel, motor vehicle
insurance, new vehicles, personal care, and household furnishings and
operations all rose in December. The indexes for used cars and trucks,
recreation, and medical care were among those to decline over the month.
The
all-items index rose 1.4% for the 12 months ending December, a slightly larger
increase than the 1.2% rise reported for the period ending November. The index
for all items less food and energy rose 1.6% over the last 12 months, as it did
in the periods ending October and November. The food index rose 3.9% over the
last 12 months, while the energy index fell 7.0%.
The
producer price index for final demand (PPI-FD) increased 0.3% in December (+0.3%
expected).
This rise followed advances of 0.1% in November and 0.3% in October. On an
unadjusted basis, the final demand index moved up 0.8% in 2020, after
increasing 1.4% in 2019.
The
MoM advance in the final demand index can be traced to a 1.1% increase in
prices for final demand goods. Conversely, the index for final demand services
edged down 0.1%.
Prices
for final demand less foods, energy, and trade services rose 0.4% in December,
the eighth consecutive advance. In 2020, the index for final demand less foods,
energy, and trade services moved up 1.1%, following a 1.5% increase in 2019.
Final Demand
Final
demand goods: The index for final demand goods advanced 1.1% in December, the
largest increase since moving up 1.5% in May. Over 70% of the December rise can
be traced to prices for final demand energy, which climbed 5.5%. The index for
final demand goods less foods and energy advanced 0.5%. In contrast, prices for
final demand foods inched down 0.1%.
Product
detail: Nearly half of the December increase in the index for final demand
goods is attributable to gasoline prices, which jumped 16.1%. The indexes for
iron and steel, diesel fuel, jet fuel, meats, and home heating oil also moved
higher. Conversely, prices for natural cheese (except cottage cheese) fell 10.8%.
The indexes for electric power and for electronic computers and computer
equipment also declined.
Final
demand services: The index for final demand services inched down 0.1% in
December, the first decrease since falling 0.4% in April. Leading the December
decline, margins for final demand trade services decreased 0.8%. (Trade indexes
measure changes in margins received by wholesalers and retailers.) Prices for
final demand transportation and warehousing services edged down 0.1%. In
contrast, the index for final demand services less trade, transportation, and
warehousing rose 0.2%.
Product detail: Leading the December decrease in the index for final demand services, margins for fuels and lubricants retailing fell 6.6%. The indexes for apparel, footwear, and accessories retailing; health, beauty, and optical goods retailing; airline passenger services; and deposit services (partial) also moved lower. Conversely, prices for portfolio management increased 1.7%. The indexes for long-distance motor carrying, machinery and equipment parts and supplies wholesaling, and loan services (partial) also advanced.
The not-seasonally adjusted price indexes we track all rose on both MoM and YoY bases.
The foregoing comments represent the
general economic views and analysis of
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