PPI Ex Food, Energy and Trade YoY

PPI Ex Food, Energy and Trade YoY is the 12-month percent change in a Bureau of Labor Statistics (BLS) index. It covers final demand less foods, energy and trade services. Final demand means output sold for personal consumption, capital investment, government use and export.

It covers average selling prices received by domestic producers, not prices paid by consumers, which the Consumer Price Index (CPI) tracks. It excludes imports, taxes and tariffs, which are not producer revenue. By stripping 3 volatile parts, it stays narrower and smoother than headline PPI, the overall index.

Prices cover the Tuesday of the week containing the 13th day of the reference month, collected monthly mostly online. Late reports are estimated first and updated later. Publication follows monthly in the second week after the reference month, at 8:30 a.m. Eastern Time (ET).

Each release names the next date; dates shift for federal holidays or closures. The release adds full tables and a detailed report. Indexes revise over the next 3 months and turn final 4 months after first publication.

Seasonal factors reset each January using the prior 5 years of price moves. Each release leads with the 1-month seasonally adjusted move and the 12-month unadjusted change. Higher means faster inflation and lower means cooling.

Kept blocks drive it, covering 68.507% (about 68.5%) of final-demand weight; food, energy and trade margins are out.

• Foods and energy goods: food and fuel goods, excluded from this index.
• Trade services: wholesale and retail margins, selling price minus acquisition price, excluded as volatile.
• Goods less foods and energy: remaining goods after food and energy are removed.

• Transportation and warehousing services: freight and passenger transport margins.
• Services less trade, transportation, and warehousing: finance, health, professional services and accommodation, the largest kept block.
• Construction: new construction.

August 2023, released September 14, 2023, shows the logic. Headline final demand rose 0.7% on the month, the largest since 0.9% in June 2022, and 1.6% over 12 months. Energy surged 10.5%, with gasoline up 20.0%, while foods fell 0.5% and trade margins fell 0.3%.

Goods drove about 80% of the monthly rise, so the headline sprinted on fuel. The stripped index rose only 0.3% on the month, the same as in July 2023. It rose 3.0% over 12 months, the largest advance since 3.4% in April 2023.

1. Fixed basket: BLS picks establishments and transactions by size and value. It reprices the same sale monthly, holding item definition and sales terms constant.

1. Modified Laspeyres formula: the index divides base-quantity costs at new prices by base-period cost, scaled to 100; prices move, quantities stay fixed. In practice it chains weighted price relatives, or item-level price ratios, each month.

1. Weights: values come from Census Bureau shipment and revenue data, refreshed about every 5 years, since January 2023 from 2017 censuses. Published December relative importance stands in for dollar weights and moves only on relative prices between Decembers.

1. Gap filling: missing items take the cell average move, or mean of similar items, so gaps do not shift the index.

1. Seasonal adjustment and YoY: monthly moves use X-13 ARIMA for regular seasonal patterns; the 12-month change uses unadjusted indexes. For example, July 2023 at 128.181 and August 2023 at 128.613 give a 0.3% monthly rise. The published 12-month rise was 3.0%, implying about 124.87 in August 2022.

1. Reference base: Final Demand-Intermediate Demand (FD-ID) indexes use November 2009 = 100; this detailed series is tabled at 08/13.