The Free Press WV

The Producer Price Index for final demand edged up 0.1 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices fell 0.1 percent in both January and December. (See table A.) On an unadjusted basis, the final demand index moved up 1.9 percent for the 12 months ended in February.

In February, the increase in the final demand index can be traced to a 0.4-percent rise in prices for final demand goods. The index for final demand services was unchanged.

The index for final demand less foods, energy, and trade services inched up 0.1 percent in February following a 0.2-percent advance in January. For the 12 months ended in February, prices for final demand less foods, energy, and trade services climbed 2.3 percent.

Final Demand

Final demand goods: The index for final demand goods increased 0.4 percent in February following three consecutive declines. Over 80 percent of the advance can be traced to prices for final demand energy, which rose 1.8 percent. The index for final demand goods less foods and energy edged up 0.1 percent. Conversely, prices for final demand foods fell 0.3 percent.

Product detail: Forty percent of the increase in the index for final demand goods is attributable to a 3.3-percent rise in gasoline prices. The indexes for diesel fuel, jet fuel, integrated microcircuits, residual fuels, and beef and veal also moved higher. In contrast, prices for fresh and dry vegetables declined 12.8 percent. The indexes for iron and steel scrap and for residential natural gas also decreased.

Final demand services: Prices for final demand services were unchanged in February following a 0.3-percent rise in January. In February, a 0.3-percent increase in the index for final demand services less trade, transportation, and warehousing offset a decline of 0.4 percent in margins for final demand trade services and a 1.3-percent decrease in the index for final demand transportation and warehousing services. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: In February, prices for traveler accommodation services rose 5.3 percent. The indexes for machinery, equipment, parts, and supplies wholesaling; food retailing; portfolio management; and legal services also moved higher. Conversely, margins for fuels and lubricants retailing fell 10.5 percent. The indexes for apparel, jewelry, footwear, and accessories retailing; airline passenger services; health, beauty, and optical goods retailing; and nonresidential real estate services also declined.

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