Producer prices for final demand in the US decreased 0.3% month-over-month in May of 2023, following a 0.2% rise in April, and compared to market forecasts of a 0.1% drop.
Goods prices went down 1.6%, the largest decrease since July 2022, mainly due to a 13.8% drop in gasoline prices and a 1.3% fall in food. Year-on-year, producer prices rose 1.1%, the least since December 2020.
Final demand goods fell -1.6%: The 1.6% decline in May, the largest since July 2022, was primarily driven by a 6.8% drop in the index for final demand energy. Prices for final demand foods decreased by 1.3%, while the index for final demand goods less foods and energy increased by 0.1%.
Product detail: 60% of the May decline in the final demand goods index can be attributed to a 13.8% drop in gasoline prices. Diesel fuel, chicken eggs, jet fuel, fresh and dry vegetables, and iron and steel scrap indexes also fell. On the other hand, tobacco product prices increased by 1.7%, and electric power and beverage material indexes also saw increases.
Final demand services rose 0.2%. This index increased by 0.2% in May, following a 0.3% increase in April. Leading this increase were margins for final demand trade services, which rose by 1.0%. Prices for final demand services less trade, transportation, and warehousing edged up 0.1%.
However, the index for final demand transportation and warehousing services declined by 1.4%. Over 40% of the May increase in prices for final demand services was due to a 4.2% rise in margins for automobile and automobile parts retailing.
Other indexes that advanced include fuels and lubricants retailing, apparel retailing, securities brokerage, and machinery and vehicle wholesaling. However, truck transportation of freight prices fell 2.1%, and portfolio management and health, beauty, and optical goods retailing indexes also decreased.